Here's SCO's Memorandum In Opposition to Defendant International Business Machines' Motion for Summary Judgment of Non-Infringement, which was argued on September 15, as text. It's not new, of course, but we didn't have a text version, so this is just to complete our collection. Thanks go to Loguar for the transcript.
***********************************
Brent O. Hatch (5715)
HATCH, JAMES & DODGE, PC
[address, phone, fax]
Robert Silver, Esq. (admitted pro hac vice)
BOIES, SCHILLER & FLEXNER LLP
[address, phone, fax]
Stephen N. Zack (admitted pro hac vice)
Mark J. Heise (admitted pro hac vice)
BOIES, SCHILLER & FLEXNER LLP
[address, phone, fax]
Attorneys for The SCO Group,
Inc.
IN THE UNITED STATES DISTRICT
COURT
FOR THE DISTRICT OF UTAH
THE SCO GROUP, INC.,
Plaintiff/Counterclaim-
Defendant,
vs.
INTERNATIONAL BUSINESS
MACHINES CORPORATION,
Defendant/Counterclaim-
Plaintiff.
|
MEMORANDUM IN OPPOSITION
TO DEFENDANT INTERNATIONAL BUSINESS MACHINES' MOTION FOR SUMMARY
JUDGMENT ON ITS TENTH COUNTERCLAIM FOR DECLARATORY JUDGMENT OF
NON-INFRINGEMENT
Civil No. 2:03CV0294 DAK
Honorable Dale A. Kimball
Magistrate Judge Brooke C. Wells |
TABLE OF CONTENTS
PRELIMINARY STATEMENT
.....................................................................................................1
STATEMENT OF DISPUTED
FACTS..................................................................................................................................9
A. The Development and Licensing of
UNIX.................................................................................................................9
B. SCO's Ownership Interest
.......................................................................................................................................11
C. The Development of
Linux........................................................................................................................................12
D. SCO's Legal Claims Against IBM
...........................................................................................................................14
1. SCO's
Contract
Claims.........................................................................................................................................14
2. SCO s
Copyright
Claim........................................................................................................................................18
E. IBM's Tenth Counterclaim and Summary
Judgment Motion
...............................................................................22
F. IBM's Linux-Related Activities
..............................................................................................................................23
G. SCO'S Compliance With Its Discovery
Obligations...............................................................................................28
H. IBM's Mischaracterizations of SCO's Public
Statements
....................................................................................41
ARGUMENT........................................................................................................................................................................42
I. IBM'S REQUEST FOR A RETROACTIVE DISCOVERY CUT-OFF,
AND THE SANCTION OF SUMMARY JUDGMENT, ON ITS
RECENTLY-ADDED TENTH COUNTERCLAIM IS MERITLESS AS
A MATTER OF FACT AND LAW ........................................................................................................ 42
A. IBM's
Misguided Accusations Fail to Establish Any Discovery Noncompliance,
Much Less Bad Faith
Noncompliance,
by SCO, A Legal Prerequisite to the Imposition of Any Dispositive
Sanction....................44
1. SCO Has Complied With Its Discovery Obligations In Good Faith
............................................................44
2. Bad Faith Noncompliance Is an Indispensable Legal Prerequisite to
the Extreme Dispositive Sanction
That IBM Seeks
..............................................................................................................................................50
B. The Extreme
Sanction That IBM Requests Lacks Any Legal Basis
...............................................................51
1. IBM's Motion Ignores, and Miserably Fails, All Five Prongs of This
Circuit's "Just Sanction" Test........51
2. IBM's Requested Sanction Is Not Even Rationally, Much Less
Specifically, Related to IBM's Discovery
Complaints.......................................................................................................................................................54
II. EVEN IF CONSTRUED AS A PROPER MOTION FOR
SUMMARY JUDGMENT, IBM'S MOTION FAILS
UNDER THE FACTS AND THE
WELL-ESTABLISHED
LAW..............................................................................55
A. IBM Has
Failed to Meet Its Burden of Production on Summary
Judgment..................................................56
B. IBM's Motion
for Summary Judgment Is Premature Under Federal Rule of Civil Procedure
56(f)...........60
1. In Conjunction with SCO's Rule 56(f) Materials, the Procedural
Posture of the Case Compels Denial of
IBM's Motion on Several Bases
...................................................................................................................63
2. The Materials SCO Has Filed Pursuant to Rule 56(f) Further Compel
Denial of IBM's Motion.............71
CONCLUSION...................................................................................................................................................................90
ADDENDUM
Plaintiff The SCO Group, Inc. ("SCO")
respectfully submits this memorandum in opposition to Defendant
International Business Machines' ("IBM") Motion for Partial
Summary Judgment on its Tenth Counterclaim for Declaratory Judgment of
Non-Infringement.
PRELIMINARY
STATEMENT
IBM moves for summary judgment on its broad
and complex Tenth Counterclaim less than two months after it was filed,
and after SCO has moved to dismiss it. Given its prematurity, IBM's
motion does not attempt to address the underlying substantive issues:
IBM does not contend that, with the benefit of discovery going forward,
SCO could not develop facts to oppose the Tenth Counterclaim.
Instead, IBM makes a procedural argument: IBM
argues that SCO must oppose the counterclaim now - only with facts SCO
discovered and developed before
the counterclaim was filed. IBM actually claims that SCO should be
sanctioned with the penalty of summary judgment if SCO even attempts to
develop additional evidence to oppose IBM's new counterclaim.
No doubt IBM, like many litigants, would like
to win its claim before it even has to file it. But if IBM has a claim,
it must support that claim and permit SCO to test it through discovery
and on its merits. IBM presents no facts or law to excuse it from that
obligation.
On March 29, 2004, IBM filed its Tenth
Counterclaim, seeking 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 Linux, and that some or all of SCO's purported
copyrights in UNIX are invalid and unenforceable." IBM's Second Am.
Countercl. ¶ 173. On April 23, SCO moved to dismiss or stay the
counterclaim, and that motion is now pending before the Court. On May
18, IBM opposed SCO's motion and simultaneously filed its present
motion asking the Court to declare that none of IBM's ongoing "Linux
activities" infringes any SCO copyright.1
The scope of the issues included in the
proposed declaration is sweeping: even aside from the issue of its own
contributions and other Linux-related activities, in its capacity just
as a Linux end-user, IBM would not be entitled to a non-infringement
declaration under the copyright laws if Linux contains any infringing
material - no matter who contributed it. IBM's claim thus adds the
substantial issue of such third-party contributions, made by thousands
of unaffiliated computer programmers over almost a decade.
Despite the sweeping immunity that IBM seeks and
even now unforseeable number of issues its new claim would add, IBM
claims that SCO must defend against that claim based only on facts SCO
developed before that claim was filed.
To support its extraordinary request, IBM
relies on claims about certain discovery documents and Magistrate
decisions. Those are the claims that provide the material fact
questions at the center of this summary judgment motion. It is
precisely because IBM places those claims at the center of its motion --
and because the facts at issue are all matters of record available for
the Court's review -- that IBM's demonstrably inaccurate descriptions
are so inexplicable. To support its claim that SCO should not be
permitted to develop additional facts to defend against its new
counterclaim, IBM offers selected quotations from documents and omits
key portions that contradict its theory. IBM then reinforces these
selected quotations with an equally selective presentation of the
Magistrate Judge's Orders, omitting decisions that expressly contradict
the facts as IBM has portrayed them.
The problem before the Court is not whether
IBM's motion is premised on material inaccuracies -- it demonstrably is
-- but why IBM has required SCO and the Court to go through the exercise
of correcting them. This is not the first time IBM has advanced such
inaccurate discovery claims in an attempt to cut short SCO's ability to
develop its proof for trial. When IBM was last before this Court, it
argued for, but did not receive, an August 4, 2004 fact-discovery
cut-off. Now IBM seeks the retroactive imposition of an April 19, 2003 cut-off --
four months earlier than the cutoff IBM requested last time, and ten
months earlier than the cut-off this Court imposed.
IBM's Motion Rests on Selected and
Misleading Quotations from
SCO's Discovery Responses and the Court's Discovery Rulings
At the center of IBM's argument are the
discovery responses that SCO provided on January 12 and April 19, 2004,
with which SCO provided certifications in accordance with the
Magistrate Judge's December and March Orders. Pursuant to those Orders,
SCO described in the certfications its good faith discovery compliance
efforts. IBM tells the Court that SCO certified its responses as
"complete, detailed and thorough," and, on that basis, argues that SCO
should be limited to those responses for purposes of IBM s dispositive
motion. SJ Mem. ¶ 40. Alternatively, IBM claims, if SCO seeks to
oppose the counterclaim with material not produced in January or April,
or if SCO seeks more discovery to develop such facts, then SCO "falsely
certified that it has provided complete, detailed and thorough answers
to IBM s interrogatories and the Court's orders." Id. at 30. In that case,
IBM asserts, this Court should sanction SCO by granting IBM summary
judgment on its Tenth Counterclaim. Id.
This is the sole ground for IBM's motion, and
it depends on the accuracy and "completeness" of IBM's description of
SCO's discovery certifications and the Magistrate Judge's orders. But
the very documents and decisions on which IBM relies by their express terms
contradict IBM's representations to this Court. For example, IBM fails
to mention either of the following statements from SCO's discovery
responses:
-- These
Supplemental Responses, which exceed 60 pages, fully respond to the
interrogatories based on the
information in SCO s possession.
Upon receiving complete
discovery from IBM, including all versions of AIX
and Dynix/ptx,
there undoubtedly will be further evidence of IBM's contractual
breaches and other violations
of law, as detailed in the attached
Declaration of Ryan Tibbits. Accordingly, SCO reserves the
right to further
supplement or amend its answers as
discovery or further investigation may reveal." SCO's
Notification of
Compliance, Jan.
12, 2004 (Ex. 11) (emphasis added).
-- "Based on the information currently
in SCO's possession, the answers given and materials produced in
response to the Order are given
to the best of SCO's
knowledge and are complete detailed and thorough."
Decl. of Chris Sontag,
Apr. 19, 2004 (Ex. 18) (emphasis added).
Consistent with the approach the Magistrate Judge approved, these
certifications described why
SCO's discovery responses were not final and complete, and explained
what additional information SCO needed from IBM in order to provide
more complete responses.
What makes IBM's omissions even worse is that
at the time SCO provided its certifications, there was a live dispute
as to whether SCO had even the beginnings of sufficient discovery from
IBM and, as IBM further fails to mention, the Magistrate Judge agreed with SCO. In her
March 3 Order, the Magistrate Judge concluded:
-- that SCO's
efforts to comply with its discovery obligations were in good
faith, 3/3/04 Order at 3 ¶ 1 (Ex.
15); and
-- that SCO did need more information
from IBM to respond to IBM's discovery demands (and to develop its
own case), ordering IBM to provide
some of the basic information SCO said it needed to provide additional
discovery responses, id. at 4 ¶ 1.
Until these orders -- issued nine months after SCO requested the
material -- IBM had not provided SCO with even a single version of one
of the two (not publicly available) operating systems at the center of
SCO's contract case, IBM's AIX program. Id. Until SCO could begin
work on that program, it could not begin portions of work needed even
to begin to respond more fully to IBM's discovery requests. By the time
IBM produced a readable version of AIX, SCO had been unable even to
begin that initial work until fewer than twenty business days before
the April 19 fact cut-off that IBM now proposes.
Moreover, based on the Court's "good faith"
finding and the very points from SCO's certification that IBM's motion
omits, the Magistrate Judge also established a procedure for deciding
additional such issues. The Magistrate established the ongoing
procedure -- which is now underway -- precisely to preserve its
jurisdiction to accord SCO the very discovery rights that IBM asks this
Court to sanction SCO for seeking to exercise.
Thus, in addition to relying on selective
quotations directly contradicted by omitted express language, IBM's
motion ignores -- and depends on the outright denial of -- this
indisputable discovery history.
IBM's Continued Stonewalling Has
Forced SCO to File a
Renewed Motion to Compel
in Order to Obtain Fundamental Discovery
While asking the Court to block SCO from even
trying to develop facts beyond what it had on April 19, IBM also
continues to hold back material that the Magistrate Judge ordered IBM to produce in
her March 3 Order. This is discovery material of the most rudimentary
kind that SCO requested over
a year ago, that courts routinely rely on in making copyright
infringement determinations, and for which SCO has now been forced to renew its prior motion to
compel -- this time simply to secure compliance with the Court's Order. See SCO's Renewed Motion to
Compel, July 6, 2004 (Exh. 25).
SCO seeks material that directly overlaps with
the kinds of discovery and fact development IBM wants to stop by
imposing its retroactive April 19 cut-off. For example, SCO has been
seeking for over a year, and in March the Magistrate ordered IBM to
produce, the identities and precise contributions of AIX programmers.
In the first instance, this information would allow SCO to take
depositions of principal programmer contributors to show IBM's reliance
on protected SCO material; such depositions would provide, or lead to,
admissions of IBM's contract liability. See Part I.B.2, below. But this discovery is also
directly relevant to IBM's new counterclaim: SCO needs such
depositions to streamline the otherwise extremely time-consuming
investigation and discovery process so that SCO can further develop
proof of IBM's non-literal copyright violations. See Part II.B.1, below. IBM
still refuses to provide this information, claiming that it was
contained in the AIX program itself. Even if that claim were true, SCO
only received access to the first version of AIX from IBM on March 24,
far too short a time to notice and take depositions and then build on
the results before the April 19 cut-off that IBM's motion seeks to
impose. But, as SCO has shown in its renewed motion to compel, IBM's
claim is not true. See
id. IBM's
present motion makes the extraordinary request to this Court to cut-off
SCO s ability to work, so that even IBM's refusal to comply with its
Court-ordered obligations to produce critically relevant discovery will
have no impact on SCO's ability to defend against IBM's counterclaim.
IBM Attempts to Force SCO to Use
an Impossibly Time-Consuming Copyright Investigation
Process (Without Discovery or Relevant Depositions) -- While Cutting Off
SCO's Time to Develop
Its Case.
IBM further contends that SCO should be forced
to use the most inefficient and timeconsuming means of developing its
defense to IBM's counterclaim. IBM notes that it is possible for SCO to
set UNIX and Linux side by side and simply compare the millions and
millions of lines of source code in the multiple versions of these
operating systems. Although it is possible to do this, when
the comparison is being made to find evidence of non-literal copying,
and when the magnitude of the search is as broad as this comparison
would entail, this method would waste an enormous amount of time and
resources. See Part
II.B.2, below.
SCO is not required to try to accomplish a
non-literal copyright investigation of this magnitude in the least
efficient way, without targeted depositions and other discovery that
IBM's withholding of fundamental information has precluded. As
discussed above, the discovery IBM seeks to prevent by its motion
includes the very deposition discovery SCO would be able to pursue once
IBM complies with the Magistrate Judge's order. IBM may not force SCO
to use the least efficient and most time-consuming method of
investigation -- which would shield IBM's admissions of contract
liability from scrutiny -- while at the same time demanding that SCO's
investigation be cut off on a retroactive basis.
IBM's motion thus turns the law of summary
judgment on its head. IBM tries to withhold discovery, slow down the
process of investigation, and then cut off the time for work. The law
requires just the opposite: that discovery be used to make the process
as efficient as possible -- and then, in complex software cases
involving non-literal copying, that summary judgment motions be
deferred until after
fact and expert discovery has been completed (where, even then, they
are disfavored). See
Part II.A, below.
IBM's Motion Fails for Several
Additional, Independent Legal Reasons
In sum, IBM's motion depends on the actual
facts of the discovery process in this case - and IBM's version of
those facts cannot withstand scrutiny. As discussed further herein,
IBM's motion fails for the following independently-sufficient reasons:
-- IBM cannot
satisfy a single element of the multi-part test a litigant must meet to
warrant the sanction IBM
seeks, see Part I, below;
-- Even if its
motion is construed as a proper motion for summary judgment, IBM does
not remotely satisfy its
burden of production, see Part II.A, below;
-- If necessary,
the Court should deny IBM's motion under Fed. R. Civ. P. 56(f) in light
of the procedural
posture of this case, such as the
absence of any expert reports in this complex area of copyright law,
SCO's
pending and renewed motion to
compel, and the very early stage of discovery on the Tenth
Counterclaim,
see Part II.B.1, below; and
-- The Court
should deny IBM's motion on the grounds set forth in SCO's 56(f)
materials, which also
demonstrate the existence of genuine
issues of material fact, see
Part II.B.2, below.
As to each of those independent lines of authority, IBM's only response
is its contention that SCO represented its previous discovery responses
to constitute all of the evidence SCO could ever find on the subject of
the requests. As shown above, that contention is not at all accurate;
indeed, it is inexplicably inaccurate.
_______________
A pattern to IBM's conduct has emerged. First, IBM takes every
possible step to hold back the most basic information to prevent SCO's
investigation from proceeding. Second, IBM inaccurately
represents what has occurred in discovery and inaccurately represents
the Magistrate Judge's response. Third, having prevented SCO
from receiving basic discovery, IBM asks the Court to cut off the
possibility of further discovery and further work. The same pattern
characterized IBM's opposition to SCO's motion to amend the Scheduling
Order, where IBM implicated the same discovery matters that it does
here, asked the Court to cut short work before IBM had even allowed it
to begin, and asked the Court to overrule Judge Wells in some (though
not all) of the same ways it does here.
IBM repeatedly tells the Court (and the world)
that SCO has no case and that SCO seeks only to delay. But a defendant
who truly believes its adversary has no case, who truly wishes to avoid
delay, does not:
-- take every possible step -- even in the face of court orders -- to
withhold access to the information needed to test its position, thereby
ensuring great delay; and
-- then ask the Court to cut off all work so that its position can
never be tested, thereby ensuring that even a plaintiff with a very
strong case could never prosecute it.
Discovery battles are common and, to some extent, unavoidable in
complex civil litigation. This pattern is not. SCO demonstrates below
the multiple, independently-sufficient grounds that defeat IBM's
motion.
STATEMENT OF
DISPUTED FACTS2
A. The Development and Licensing of
UNIX
1. In 1969, SCO's predecessor-in-interest,
AT&T, created the UNIX computer operating system ("UNIX").3
IBM's Second Am. Countercl.
¶ 8 (Exh. 16).4
2. Over the years, AT&T Technologies,
Inc., a wholly-owned subsidiary of AT&T, participated with related
companies in licensing UNIX to numerous businesses for widespread
enterprise use. Id.
¶ 9. IBM, Hewlett-Packard, Inc. ("HP"), Sun Microsystems, Inc. ("Sun"), Silicon Graphics, Inc. ("SGI"), and Sequent Computer Systems,
Inc. ("Sequent") (which has since merged into IBM through a stock
acquisition) became some of the principal United States-based UNIX
licensees. See, e.g.,
IBM Software Agreement (Exh. 26); Sequent Software Agreement (Exh. 30);
SGI Software Agreement (Exh. 34).
3. IBM, HP, Sun, SGI and Sequent each created
modifications of UNIX to operate on their processors, modifications
that are commonly referred to as "flavors." The Many Flavors of Unix,
http://www.albion.com/security/intro-3.html (last visited July 8, 2004)
(Exh. 57).
4. After licensing UNIX System V (a version of
UNIX) in 1985, IBM devised its AIX operating system, IBM's Second Am.
Countercl. ¶ 13 (Exh. 16), and Sequent devised its Dynix/ptx
("Dynix") operating system. Id.
¶ 16.
5. AIX and Dynix/ptx are each modifications
of, and derivative works based on, UNIX System V source code: AIX and
Dynix each contain thousands of lines of UNIX System V Code, SCO s Am.
Resp. to IBM's Fourth Set of Interrogs. at 11-44 (Exh. 5-1), and IBM's
internal documents even refer to AIX as a derivative work based on UNIX
System V. Exhs. S-5 at 2 ("AIX was derived from System V."); S-6 ¶
8.4 ("AIX is derived from software under license from SCO."); S-4
(stating that AIX is "derived from System V"); see also Rodgers Dep. at
19-23 (Exh. S-2) (discussing how Sequent required access to UNIX source
code), 138 ("Dynix/ptx is almost certainly a derivative work of Unix
System V.").
B. SCO's Ownership
Interest
6. Through a series of corporate acquisitions,
SCO owns all right, title, and interest in and to UNIX operating system
source code, software, licensing agreements, and any legal claims
arising out of those agreements. SCO also owns copyrights and
additional licensing rights in and to UNIX. Specifically, in May 2001,
Caldera International, Inc. ("Caldera International") purchased the
Professional Services and Server divisions and their UNIX-related
assets from The Santa Cruz Operation, Inc., IBM Statement ¶ 14,
which had acquired these assets in 1995 from Novell, Inc. ("Novell"). See Asset Purchase
Agreement Between SCO and Novell, Sept. 19, 1995 (Exh. 32). Novell, in
turn, had purchased its rights from AT&T in 1993. See IBM's Second Am.
Countercl. Against SCO ¶ 10 (Exh. 16).
7. At the time of Caldera International's
acquisition of Santa Cruz's assets in 2001, Caldera International also
acquired the stock of Caldera Systems, Inc., which had been formed in
1998. Caldera International
Reports Second Quarter Results, Business Wire, June 6, 2001
(Exh. 40). In May 2003, Caldera International changed its name to The
SCO Group. IBM Statement
¶ 15.
C. The Development of Linux
8. Linux is a computer operating system that
was developed through decentralized contributions of computer code by
thousands of developers around the world. IBM Statement ¶ 4;
Sontag Decl. ¶ 57. Linux is an "open source" program, meaning that
the program's source code is available for anyone to access, use,
extend, or modify. IBM's Second Am. Countercl. ¶ 22 (Exh. 16).
9. Linux was first created in 1991, when a
Finnish college student named Linus Torvalds began developing Linux as
a hobby after studying an operating system that one of his professors
had based on and derived from UNIX. IBM Statement ¶ 2; SCO Linux Introduction Version 1.2
§ 1-5 (2002) (Exh. S-7).
10. Thereafter, Mr. Torvalds posted his
programming material on the Internet for comment, and the development
of the operating system became in effect a group project in which Mr.
Torvalds and his delegates made final determinations about which
suggestions from third parties to incorporate. Sontag Decl. ¶ 57.
The kernel of the operating system5 that resulted came to
be known
as Linux. IBM Statement ¶ 3.
11. The Linux development process did not
employ any mechanism to ensure that intellectual property rights,
confidentiality, or security were protected, or to prevent the improper
inclusion of computer code that had been stolen outright or had been
developed by improper use of proprietary methods and concepts;
contributors to Linux were not even required to formally assign their
copyrights or to guarantee their ownership of copyrights over the
materials they contributed. Sontag Decl. ¶ 57; Roger Parloff, Gunning for Linux, Fortune,
May 17, 2004, at 90, 92 (Exh. 44).
12. SCO is not aware of any "road
map" that allows it to trace the migration of UNIX code into
Linux. Sontag Decl. ¶ 57. Although there is limited public
information (and some public consensus) regarding contributors of
source code into Linux, even the identities of all the principal
contributors to Linux are not public information. Amy Harmon, The Rebel Code, N.Y. Times,
Feb. 21, 1999, § 6 at 34 (Exh. 59). Some contributors of source
code indicate their identity therein -- but even then their
identity may be pseudonymous. Id.
Many other contributors of source code do not indicate their identity
therein, and have not publicly acknowledged their contributions. Id.
13. It is undisputed that IBM has contributed
source code to Linux. Frye Decl. ¶ 5 (Exh. 21); IBM Statement
¶ 4. In fact, IBM has contributed source code from UNIX "flavors"
AIX and Dynix into Linux. See
SCO's Revised Supplemental Response to IBM's First and Second Set of
Interrogs. at 3-29 (Exh. 13); 4/19/04 Hatch Letter Tabs C, D, E and F
(Exh. 19). Moreover, SCO has identified evidence of literal and
non-literal copying of material from UNIX into Linux. See Harrup Decl. ¶ 72;
Gupta Decl. ¶ 3.
14. Linux contains approximately 8,750
individual files and 4 million lines of code, in the kernel alone.
Sontag Decl. ¶ 4.
D. SCO s Legal Claims Against IBM
1. SCO s Contract Claims.
15. SCO filed this lawsuit against IBM on
March 6, 2003. SCO's lawsuit has always been based principally on IBM's
violation of its obligations under UNIX licensing agreements that IBM
and its predecessor-in-interest Sequent had entered into with SCO's
predecessor-in-interest, AT&T.6
The primary license agreements at issue in this case were entered into
by IBM on February 1, 1985 and by Sequent on April 18, 1985 (the
"Software Agreements").7
16. These Software License Agreements
prohibited the licensees from transferring, in any manner, in whole or
in part, UNIX and/or any derivative works based on UNIX:
AT&T grants to Licensee a personal, nontransferable and
nonexclusive right to use in the United States each
Software Product8 identified in the one
or more
Supplements hereto, solely
for Licensee s own internal
business purposes and solely on or
in conjunction with Designated CPUs for such Software Product. Such right
to use includes the right to
modify such Software Product and to prepare derivative works based on
such
Software product, provided the
resulting materials are treated hereunder as part of the original
Software
Product. IBM Software
Agreement, SOFT-00015 § 2.01 (Exh. 26) (emphases added).
17. In addition to specifying that the
licensees' use of UNIX and its derivatives was "nontransferable" and
restricted to the licensees' "own internal business purposes" on
designated computers, the Software Agreements provided, in Section
2.05, that "[n]o right is granted by this Agreement for the use of
Software Products directly for others, or for any use of Software
Products by others."9
Exh. 26.
18. Each of the UNIX licensees was also
required to hold "Software Products subject to this Agreement" -- i.e., UNIX and any
"resulting materials" from "derivative works based on such Software
product" under Paragraph 2.01 -- "in confidence." Sequent Software
Agreement, SOFT 000321 § 7.06 (Exh. 30); IBM Side Letter ¶
A.9 (Exh. 28). Moreover, Sequent's Software Agreement prohibited it
from making "any disclosures
of any or all of such SOFTWARE PRODUCTS (including methods or concepts
utilized therein) to anyone, except to employees of LICENSEE to
whom such disclosure is necessary to the use for which rights are
granted hereunder." Sequent Software Agreement, SOFT 000321 § 7.06
(Exh. 30) (emphasis added).
19. At the time that IBM executed its Software
Agreement, it also entered into a side letter agreement with AT&T
(the "IBM Side Agreement"), by which the parties agreed that IBM would
own derivative works prepared by or for it: "Regarding Section 2.01, we
agree that modifications and derivative works prepared by or for you
are owned by you. However, ownership of any portion or portions of
SOFTWARE PRODUCTS included in any such modification or derivative work
remains with us." IBM Side Agreement ¶ A.2 (Exh. 28). Nothing in
the IBM Side Agreement abrogated IBM's obligation, pursuant to the
plain language of Section 2.01 of its Software Agreement, to restrict
its use of derivative works based on UNIX according to the terms of
that agreement.10
20. The Sequent Software Agreement (Exh. 30),
which was executed more than two months after both IBM's Software
Agreement and the IBM Side Letter, never included any such side
agreement.
21. SCO's contract claims do not depend on any proof that IBM contributed
original source code from UNIX to Linux. Rather, the theory of
SCO's case -- which is based on the plain, unambiguous meaning of the
Software Agreements -- is that IBM breached those agreements by
contributing code from AIX and Dynix -- "modifications or derivative
works based on" the UNIX Software Product -- to Linux, in violation of
IBM's obligation to treat such works as if they had been part of the
original Software Product (i.e.,
solely for IBM's own internal business purposes, in confidence, without
transferring them, as required by the Software Agreements). IBM
Software Agreement, SOFT 00015 § 2.01 (Exh. 26) and Sequent
Software Agreement, SOFT 000321 § 2.01 (Exh. 30). Furthermore, IBM's contributions of code from Dynix violated its obligation under the
Sequent Software Agreement not to disclose "any or all of such SOFTWARE
PRODUCTS (including methods or concepts utilized therein)." Sequent
Software Agreement, SOFT 000321 § 7.06(a) (Exh. 30).
22. SCO has detailed for IBM its proof of the
substantial contributions of offending code from both AIX and Dynix to
the Linux operating system. See
¶¶ 59-61, below.
23. SCO believes that IBM does not want to
defend against a breach of contract action. For example, it is IBM's
position that, to establish such a breach, SCO must show IBM copying of
UNIX code into Linux. But that is what SCO would have to show under the
copyright laws, rendering the much broader language of the license
agreements inexplicable and also making it impossible to explain what
protections the innovator received beyond what it had without the
agreement. (Indeed, SCO would have more rights and fewer burdens under
the copyright laws than under the contracts as IBM now describes them.)
24. SCO contends that if IBM did not want the
burden of responsibility for contract breaches, it should not have
entered into and accepted the benefits of the contracts now at issue.
If IBM only wanted to be responsible under the copyright laws, it
should have foregone the benefits of the agreements it signed. Others --
who would remain subject only to copyright regulation -- did not receive
those benefits and thus, unlike IBM and Sequent, were not able to rely
on SCO predecessor innovations as the bases for products critical to
their own businesses.
2. SCO's Copyright Claim.
25. Accordingly, this case, from its outset,
has been about IBM's breaches of its own Software Agreement as well as
the Software Agreement that it inherited when it acquired Sequent. And,
until February 2004, there was no copyright claim of any sort in this
case. On February 27, 2004, with the filing of its Second Amended
Complaint, SCO added a single copyright claim (Count V) against IBM. As
SCO's complaint makes abundantly clear, however, that claim is based primarily on IBM's use and
distribution of AIX and Dynix after SCO terminated IBM's UNIX licenses.
See Second Am.
Compl. ¶¶ 173-80 (Exh.
14).11
26. Indeed, SCO's sole copyright claim is
expressly predicated on its claim that "Despite termination of such
Agreements, IBM has continued to reproduce, prepare derivative works
of, and distribute UNIX software, source code, object code, programming
tools, and documentation related to UNIX operating system technology,
and has induced others to do the same." Second Am. Compl. ¶ 175
(Exh. 14); see generally
id. ¶¶
173-80. It is on that basis that SCO has alleged that "IBM's breaches
of the IBM Related [software license] Agreements and the Sequent
[software license] Agreements and its post-termination actions have
infringed, have induced infringement of, and have contributed to the
infringement of, copyright registrations of SCO and its predecessors." Id. ¶ 179.
27. Furthermore, in a prior submission to this
Court, SCO has expressly acknowledged that its copyright claim does not
involve any claim relating to IBM's Linux-related activities:
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. Mem. in Support of SCO's Motion to Dismiss or
Stay the
Tenth Counterclaim at 3 (Exh. 20).
28. Thus, SCO's complaint does not involve any
claims arising out of contributions to Linux of any sort by parties
other than IBM. Moreover, SCO's Linux-related claims in this case are
expressly limited to contract claims involving IBM's capacity as a
contributor to Linux; SCO has not asserted any claims arising out of
any of IBM's other numerous, varied, and expanding activities involving
Linux. See
¶¶ 42-45, below.
29. Even though nothing in SCO's copyright
claim concerns IBM's Linux-related activities and SCO has expressly
stated to this Court that it has no such claim, in support of its
argument that SCO has already had an adequate opportunity to develop
its proof of IBM's Linux-related copyright infringement, IBM attempts
to construct for SCO a copyright claim that SCO has never asserted
against IBM.
30. In paragraphs 19 and 20 of its "Statement
of Undisputed Facts," IBM cobbles together selected, isolated portions
of SCO's complaint and concludes, in paragraph 23, that "After all, SCO
has charged IBM with copyright infringement, including with respect to
IBM's Linux activities." IBM's selective quotations from SCO's
complaint mischaracterizes SCO's copyright claim.
31. For one thing, IBM's depiction of SCO's
complaint omits any mention of the allegations from SCO's statement of
its copyright claim (quoted in paragraph 25 above), which make clear
that SCO's claim is based primarily on IBM's post-termination conduct,
and does not concern IBM's Linux-related activities.
32. Moreover, only one of the six quotations
that IBM employs from SCO's Second Amended Complaint actually comes
from the section in which SCO states its copyright claim and IBM does
not even quote that one paragraph accurately.
33. In fact, that allegation, stated in full,
makes clear that that SCO's copyright claim arises from IBM's breaches
of its license agreements and its use and distribution of AIX and Dynix
after the licenses were terminated:
IBM's
breaches of the IBM Related Agreements and the Sequent Agreements and
its post-termination actions
have infringed, have induced infringement of, and
have contributed to the infringement of, copyright
registrations of SCO and its predecessors. Second
Am. Compl. ¶ 179 (emphasis added).
In its repeated recitation of this quotation, however, IBM removes the
portion underlined above, to suggest that SCO s copyright claim
involves Linux-related activities. See IBM SJ Mem.
¶¶ 19, 23, 42.
34. The remainder of the quotations that IBM
extracts from portions throughout SCO's sixty-four-page Second Amended
Complaint do not state a copyright claim against IBM for any of its
Linux-related activities. Indeed, each of the selected portions on
which IBM relies were also included in SCO's First Amended Complaint,
which did not include any copyright claim. See First Am. Compl.
¶¶ 5(c) (Exh. 2) (stating that IBM is responsible for
incorporating (and inducing, encouraging, and enabling others to
incorporate) SCO's proprietary software into Linux open source software
offerings ); 81 ("As a result, a very significant amount of UNIX
protected code is currently found in Linux 2.4.x and Linux 2.5.x
releases in violation of SCO's contractual rights and copyrights."),
100 ("IBM has knowingly induced, encouraged, and enabled others to
distribute [SCO's] proprietary information . . . ."); 102 (noting IBM's
"coordination of the development of enterprise Linux, and the
misappropriation of UNIX to accomplish that objective").
35. Finally, paragraph 21 of IBM's "Statement of
Undisputed Facts" refers to SCO's pending suit against AutoZone in the
District of Nevada and, ostensibly based on Paragraph 109 of SCO's
Second Amended Complaint, asserts that "According to SCO, IBM is at
least partially responsible for AutoZone's allegedly infringing
conduct." IBM SJ Mem. ¶ 21 (citing SCO's Second Am. Compl. ¶
109). But Paragraph 109 of SCO's Complaint does not include any such
allegation. In any event, the fact is that SCO has not made IBM a party
in the AutoZone case. Moreover, while SCO is now litigating against IBM
in this suit, SCO has not alleged any copyright violation based on
IBM's contributions to Linux and has brought only a single, limited
copyright claim against IBM that is expressly based on IBM's use and
distribution of AIX and Dynix after the termination of its licenses.12
E. IBM's Tenth Counterclaim and
Summary Judgment Motion
36. More than a year after SCO filed its
lawsuit, on March 29, 2004, IBM attempted to insert into this case for
the first time an extraordinarily broad counterclaim that seeks the
following declaratory judgment:
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. (IBM's
Second Am. Countercl. ¶ 173.)
37. IBM's Tenth Counterclaim thus seeks to
introduce into this case new and wide-ranging issues concerning: (1) all
of IBM's Linux-related activities, including (but not limited to) its
end use, reproduction, distribution, and exploitation of Linux products
(as distinct from its role as a contributor to Linux); (2)
contributions to Linux that were made by literally thousands of parties
other than IBM; (3) the propriety of Linux's content as a whole.
38. On April 23, 2004, SCO moved to stay or
dismiss IBM's Tenth Counterclaim. In its opening memorandum, SCO argued
that the Court should exercise its discretion to grant the requested
relief because the "newly added counterclaim raises issues separate and
apart from the primary breach of contract and other direct claims and
counterclaims in this case." Mem. in Support of Mot. to Dismiss or Stay
IBM's Second Am. Countercl. at 2. IBM opposed SCO's motion on May 18,
2004 (Exh. 25B), and SCO will file its reply brief in support of its
motion on July 26, 2004.
39. On the same day that IBM filed its
opposition to SCO's motion to dismiss or stay the Tenth Counterclaim -
and less than two months after IBM had interposed that claim for the
first time -- IBM moved for summary judgment on that claim. By that
motion, IBM has asked the Court for a summary "declaration of
non-infringement with respect to IBM s Linux activities." IBM SJ Mem.
at 2.13 IBM is
thus seeking a summary declaration that it did not violate any of SCO's
numerous relevant copyrights under any three types of infringement --
(1) direct infringement; (2) contributory infringement; and (3)
inducing infringement -- through any of IBM's Linux-related activities,
including (but not limited to) its capacities as (1) a contributor to
Linux; (2) a distributor of Linux; and (3) an end-user of Linux.
40. IBM does not attempt to identify or
describe all of its Linux-related activities (for which it seeks a
declaration of immunity) with any degree of specificity. But what is
clear is that IBM's motion amounts to a request for, among other
things, a clean bill of health for the entirety of Linux --
including each of its approximately 8,750 individual files and 4
million lines of code in the kernel alone. Sontag Decl. ¶¶ 8,
15. Because IBM's role as a distributor or end-user of Linux alone
would be sufficient to demonstrate IBM's liability under black-letter
copyright law if Linux
contains any
infringing content, no matter what the source of that content, see Argument Part II below,
IBM's Tenth Counterclaim, and its motion for a summary declaration of
non-infringement, requires at least a finding that nothing in Linux infringes any copyright of SCO's.
F. IBM's "Linux-Related Activities"
41. Various public sources have reported on
IBM's vast, and expanding, Linux-related activities. For example:
a. "The company
has 250 developers working on 29 separate Linux projects worldwide,
according to Ken
King, director of technical strategy
from I.B.M.'s software group," Steve Lohr, No Concession from I.B.M. in
Linux Fight, N.Y. Times,
June 14, 2003 (Exh. 58);
b. "IBM Global
Services offers the industry s most comprehensive portfolio of Linux
consultive and support
offerings, from planning and design,
to implementation and technical support. IBM consultants skilled in
Linux are available worldwide to
help customers design, build, enhance and operate their Linux
solutions."
Linux Sweeps IBM Customers -- From
Smallest to Largest, IBM Press Release, Aug. 4, 2003 (Exh. 55);
c. "IBM plans to
invest about $2 billion this year on open standards technologies such
as Linux." Brazil, IBM
Sign Deal to Develop Linux
Technology, Forbes, Oct. 10, 2003 (Exh. 39);
d. "'With the
success of Linux on the server, the shift to deploy Linux on technical
workstations, as well as a
growing array of applications that
run under Linux, many customers are seeing the productivity and cost
benefits of these types of open
platform services. IBM is leveraging its own industry consultants and
worldwide services expertise to
respond to growing customer demand in these emerging countries and
niche segments of the
market.'" IBM
Blueprints Open Client Services for Customers in Brazil, IBM
Press
Release, June 14, 2004 (Exh. 43);
e. "All told,
more than 12,000 IBMers today devote at least part of their time to
Linux. IBM has invested
millions in two leading
distributors, Red Hat and SuSe. It has spent millions more to cofound
and fund the
nonprofit organization that oversees
Linux development." Daniel Lyons, Kill Bill, Forbes.com, June
7, 2004
(hereinafter Kill Bill) (Exh. 52);
f. "IBM could
generate hefty consulting fees installing and customizing Linuxbased
hardware and software
for clients." Kill Bill (Exh. 52);
g. "IBM has been
helping companies move their applications to Linux." Kill Bill (Exh. 52);
h. "IBM has
created 45 Linux tech centers in 12 countries, where programmers crank
out Linux code. These
are not the hippie hackers who
created the early versions of Linux. They are experienced engineers with
backgrounds designing IBM's own
operating systems, including AIX, its version of the Unix operating
system." Kill Bill (Exh. 52).
42. Moreover, IBM has submitted a Declaration
from Daniel Frye, the co-founder and present director of IBM's Linux
Technology Center, concerning several of IBM's Linux-related
activities. Beyond participating in the development of Linux, including
by contributing source code to Linux, Frye Decl. ¶ 5 (Exh. 21),
the following additional Linux-related activities are listed in Mr.
Frye's declaration:
a. providing
"Linux training and support, applications testing, technical advice and
a hands-on environment
in which to evaluate Linux and
Linux-based applications," id.
¶ 5;
b. offering
"mainframes and servers that run Linux," "memory solutions for Linux
environments," and "a
broad range of Linux-compatible
software," id. ¶
7;
c. providing
"services that assist companies in deployment of Linux-based computing
environments,
migration of database applications
and data to Linux systems, support for Linux-based cluster computing,
server consolidation, and a 24-hour
technical engineering support line," id. ¶ 7;
d.
"reproduc[ing] Linux and making Linux available to others, both in
developing and producing hardware,
software and services for customers,
and for other, internal business purposes," id. ¶ 8; and
e. using Linux
internally within IBM, as "many IBM employees -- particularly those who
work in the IBM Linux
Technology Center -- use Linux as
their platform for day-to-day business computing, running office
productivity applications,
developing software (including Linux itself), and exchanging email," id. ¶ 9.
43. Even though SCO is aware of certain of IBM's Linux-related activities through public sources and through IBM's own
statements in this litigation, SCO does not have sufficient information
to know the specifics of what such activities entail or, indeed, the
full extent of IBM's Linux related activities. Thus, although certain
information about Linux activities may be "public knowledge," SJ Mem.
30, neither IBM's submissions to this Court nor Mr. Frye's Declaration
purports to identify all of IBM's Linux-related activities or to
describe with any degree of specificity IBM's conduct with respect to
each such identified activity.
44. Whatever the full extent of IBM's
Linux-related activities, according to public reports, IBM's Linux
business is thriving. For example:
a. "Last year
[2003] IBM's Linux-related revenues grew 50% to more than $2 billion.
Even IBM's supposedly
moribund mainframe hardware business
grew 7% to just over $3 billion, thanks to Linux, which shipped on
20% of the mainframe horsepower IBM
delivered last year." Kill
Bill (Exh. 52).
b. IBM earned
"$1 billion in Linux-based revenues in 2002 -- more than double what it
got in 2001." The Big
Guys Latch Onto Linux, Bus.
Wk., Mar. 3, 2003 (Exh. 38);
c. "Today IBM
Senior Vice Present William Zeitler will announce at the Linux World
Conference that IBM
has already recouped nearly all of
its investment in Linux development, which has totaled about $1 billion
over the past few years." Lisa
DiCarlo, IBM Revives The
Mainframe, Forbes.com, Jan. 30, 2002 (Exh. 47).
d. "'As recently
as three years ago Linux was not a household name,' [Ann] Altman
[manages IBM's
business with federal government]
told Reuters, 'Today, Linux is growing at a tremendous clip with the
federal government and we really
aimed to deliver a robust security classification for Linux.'" IBM Clinches
Security Certification for Linux,
Forbes.com, Aug. 5, 2003 (Exh. 44).
e. "But 2500
customer engagements on Linux in a single year by just our company
speak to how pervasively
this movement has taken hold in the
commercial world in which we operate." Linux, Open Movement to
Transform E-business, Zeitler Says,
IBM Press Release, Feb. 1, 2001 (Exh. 54).
G. SCO'S Compliance With Its
Discovery Obligations
45. SCO has diligently complied with its
discovery obligations and with the Magistrate Judge's discovery orders.
To date, SCO has produced 241 CDs containing hundreds of thousands of
pages of documents. SCO's Source Log (Exh. 35). As requested by IBM,
SCO has produced all of the source code for its products in its
possession, which exceeds over 700 million lines of code. Id. Moreover, over the span
of dozens and dozens of pages, SCO has detailed its claims, provided
file and line numbers for source code IBM contributed to Linux in
violation of its contractual obligations, and otherwise provided all
information in its possession requested by IBM or ordered by the
Magistrate. See SCO
Reply Mem. in Support of Mot. to Amend Sched. Order at 9-13 (Exh. 22).
Indeed, in the most recent discovery order, Magistrate Judge Wells
expressly found that SCO had responded to IBM's discovery requests in
"good faith," 3/3/04 Order at 3 (Exh. 15) -- a fact that is
conspicuously absent from IBM's motion.
46. An accurate recitation of SCO's efforts to
obtain basic, but critical, discovery from IBM and of IBM's unrelenting
efforts to stymie those efforts demonstrates that SCO in fact has
complied with its discovery obligations to the fullest extent possible.
SCO initiated discovery on June 24, 2003, when it asked for a variety
of documents, including all versions or iterations of AIX and Dynix
since 1999, and also a listing of all persons who worked on AIX and
Dynix and the precise contributions of each of these persons to the
source code. See
SCO's First Request for Production of Documents, Items 2 and 3 (Exh.
1); SCO's First Set of Interrogs., Interrogatory 5 (Exh. 1). After
lengthy meet-and-confer sessions, IBM claimed compliance or ongoing
efforts at compliance, IBM's Memo. in Opposition to SCO's Mot. to
Compel, Nov. 19, 2003, at 2, 6 (Exh. 7), but SCO was left without this
discovery and eventually was forced to file a motion to compel to
receive it. On the eve of the hearing on SCO's motion to compel, in
early December 2003, IBM produced limited Dynix source code but still
no AIX code. In fact, IBM did not produce AIX code until March 2004 --
one year after suit was filed and after ordered to do so by Magistrate
Judge Wells.14
Of course, when IBM finally produced the first portions of the
necessary source code in December 2003 and March 2004, it provided only
selected snapshots of AIX and Dynix and failed to identify the precise
contributions of the IBM individuals involved in the development of AIX
and Dynix. Without even this rudimentary information from IBM, SCO was
hampered in its ability to undertake focused and meaningful discovery
and, as SCO has maintained each time it answered IBM's interrogatories,
it was not in a position to provide the specificity that IBM was
demanding.
47. As detailed below, each time IBM was
ordered to and actually did produce critical discovery, SCO was able to
provide, and provided, increasingly detailed responses to IBM's
requests. As more of this code and information is turned over to SCO,
it expects to be able to make further disclosures of IBM's violations
of SCO's rights. Rather than provide SCO with the information that SCO
requires and that this Court has ordered IBM to produce, however, IBM
is again making it virtually impossible for SCO to provide further
responses, while continuing to claim that SCO is disregarding its
discovery obligations. For example, IBM's continuing refusal to specify
its own engineers' contributions to AIX and Dynix, even after
being specifically ordered to do so by the magistrate, has prevented
SCO from noticing depositions and otherwise focusing its discovery to
seek evidence that would flow from this underlying information. Due to
the great length and complexity of the relevant computer code in this
case, and the enormous amount of labor and time that is involved in
performing the necessary code comparisons, see Sontag Decl.
¶¶ 5-9, such discovery is critical to identifying leads for
potential "hot spots" in Linux and, therefore, indispensable to SCO's
ability to take, and produce, adequate discovery in this case. By
steadfastly refusing to provide this critical discovery while
simultaneously demanding that SCO answer interrogatories that
unquestionably require access to this information, IBM has attempted to
maximize the tactical advantage of its own stonewalling.
48. The discovery issues on which IBM focuses
the accusations in its brief concern two interrogatories that IBM
propounded on September 16, 2003. IBM's Interrogatory 12 (Exh. 3)
states:
Please identify,
with specificity (by file and line of code), (a) all source code and
other material in Linux
(including but not
limited to the Linux kernel, any Linux operating system and any Linux
distribution) to
which plaintiff
has rights; and (b) the nature of plaintiff s rights, including but not
limited to whether and
how the code or other material
derives from UNIX.
Interrogatory 13 (Exh. 3) states:
For each line of
code and other material identified in response to Interrogatory No. 12,
please state whether
(a) IBM has infringed plaintiff's
rights, and for any rights IBM is alleged to have infringed, describe
in detail
how IBM is alleged to have infringed
plaintiff's rights; and (b) whether plaintiff has ever distributed the
code
or other material or otherwise made
it available to the public, as part of a Linux distribution or
otherwise,
and, if so, the circumstances under
which it was distributed or otherwise made available, when it was
distributed or made available, to
whom it was distributed or made available, and the terms under which it
was distributed or made available
(such as under the GPL or any other license).
49. When IBM served these interrogatories, no
claim for copyright infringement existed in this case, not even SCO's
narrow claim for IBM's use and distribution of AIX and Dynix after the
termination of the license agreements. Rather, the case was focused on
SCO's claims concerning IBM's breach of its obligations under the
license agreements by contributing code from AIX and Dynix to Linux.
Accordingly, on October 23, 2003, SCO initially answered
Interrogatories 12 and 13 as follows:
In addition to
the General Objections, SCO notes that it has not received responsive
discovery from IBM that
would allow it to fully answer this
question because part of this information is peculiarly within the
knowledge of IBM. In addition, SCO
objects to this question as overly broad and unduly burdensome, and on
the basis that it seeks information
neither relevant nor calculated to reasonably lead to the discovery of
admissible evidence insofar as it
requests the identity of source code and other material in Linux
contributed
to Linux by parties other than IBM
or Sequent. Subject to and without waiving these objections, as it
pertains
to SCO's rights involving IBM's
contributions, SCO incorporates its answers to its revised and
supplemental
answers to Interrogatory Nos. 1 and
2.15 (Exh. 13)
SCO's revised and supplemental responses to Interrogatories 1, 2, and 4
at that time were over 20 pages and detailed the numerous ways that SCO
believed IBM had violated the terms of its license agreement. Id. SCO specifically noted,
however, that it needed further discovery from IBM in order to
effectively identify the offending code in further detail. In fact, as
noted above, at the time SCO answered these questions, it had not
received a single line of code from AIX or Dynix from IBM.16 Thus, contrary
to IBM's claim, SCO did not "refuse" to identify with specificity IBM's
contributions to Linux, IBM Statement ¶ 32, but instead was
limited in what it could discover and produce by IBM's failure to
provide requested discovery, such as AIX and Dynix source code.
50. IBM claimed that these answers were
inadequate and, on November 6, 2003, filed a motion to compel. At the
time, IBM stated that its Interrogatories 12 and 13 were "relevant to
IBM's defenses and counterclaims irrespective of whether SCO alleges
IBM misappropriated" any material in Linux in which SCO claims rights.
IBM Mem. in Support of Second Mot. to Compel at 6. IBM further
specified how this information was purportedly relevant:
For example, IBM
alleges that SCO has: violated the Lanham Act by misrepresenting SCO's
rights to Linux
by falsely claiming ownership of
intellectual property created by the open source community (e.g., portions of
Linux); tortiously interfered with
IBM's prospective economic relations by making false and misleading
statements to IBM's prospective
customers concerning Linux; and engaged in unfair and deceptive trade
practices by publishing false and
disparaging statements about Linux. Id. at 6-7.
See also IBM's
Reply Mem. in Support of Second Mot. to Compel, at 6.17
51. In response to IBM's motion to compel, on
December 12, 2003, Magistrate Judge Wells ordered SCO to "respond fully
and in detail to Interrogatory Nos. 12 and 13 as stated in IBM's Second
Set of Interrogatories." Exh. 10 at 2. The Magistrate also directed SCO
to "identify and state with specificity the source code(s) that SCO is
claiming form the basis of their action against IBM." Id.18
52. Based on SCO's demonstration that it did
not have sufficient information in its possession to provide much of
the detail IBM was requesting, the Magistrate's December 12 Order also
provided that in cases where "SCO does not have sufficient information
in its possession, custody, or control to specifically answer any of
IBM's requests that are the subject of this order, SCO shall provide an
affidavit setting forth the full nature of its efforts, by whom they
were taken, what further efforts it intends to utilize and the expected
date of compliance." Id.
53. In response to the December 12, 2003
Order, SCO undertook exhaustive efforts during the thirty-day period
provided by the Order. On January 13, 2004, SCO produced nearly seventy
pages of detailed supplemental and revised answers to IBM's
Interrogatories 12 and 13 and other discovery requests. SCO's Revised
Supplemental Resp. to IBM's First and Second Set of Interrogs. (Exh.
13).19 In these
supplemental and revised answers, SCO devoted fourteen pages to
identifying, by file and line of code, those materials from Dynix that
IBM had copied into Linux. Id.
at 3-17. SCO was able to provide this detailed information because IBM
had produced limited versions of Dynix source code on December 4, 2003,
the day before the hearing on SCO's motion to compel the production of
that code, among other items. SCO's Reply Mem. in Support of Mot. to
Amend the Scheduling Order at 5-6 (Exh. 22). SCO also identified other
areas of Dynix that appeared to have been contributed to Linux in
violation of the license agreements, but because IBM's production of
Dynix source code was incomplete, SCO could not provide the detail of
identifying files and lines of code, which SCO explained in its
responses. SCO's Revised Supplemental Response to IBM's First and
Second Set of Interrogs. at 4, 30 (Exh. 13).
54. Although IBM provided at least some
samples of Dynix source code, it refused to provide any source code for
AIX. This severely hampered SCO's ability to supplement its answers to
identify files and lines of AIX that IBM had contributed to Linux in
violation of its license agreements; SCO only had in its possession a
1999 version of AIX and most of IBM's contributions to Linux came from
later versions of AIX. Based on that limited information, over the next
ten pages of its responses SCO was able to identify certain improper
contributions by IBM of AIX source code to Linux.20 SCO's
Revised Supplemental Response to IBM's First and Second Set of
Interrogs. at 17-26 (Exh. 13). SCO concluded its supplemental and
revised response by identifying other technologies that SCO believed
IBM had contributed to Linux in violation of its license agreements,
including specifying the bases for its belief and its need for IBM's
comprehensive source code in order to provide further details. Id. at 26-30.
55. Based on these thirty pages of answers
detailing the code IBM had contributed to Linux in violation of its
license agreements, SCO further supplemented its responses to
Interrogatories 12 and 13. Specifically, SCO incorporated this detailed
information in its response to Interrogatories 12 and 13 in order to
identify code from IBM that SCO claimed rights to in Linux and to
indicate that those rights arose from the license agreements. Id. at 58-69. SCO further
supplemented its response by identifying specific code that other UNIX
licensees had improperly contributed to Linux in violation of their
license agreements21
as well as code from unknown sources that had been copied from UNIX
System V. Id. at 59-66.
56. In addition to providing the supplemental
answers required by the Magistrate s December 12 Order, SCO supplied a
declaration, pursuant to that Order, detailing its extensive compliance
efforts. Decl. of Ryan Tibbitts, Jan. 13, 2004 (Exh. 12). SCO's
declaration detailed the difficulties created by IBM's refusal to
provide the necessary source code to SCO and specifically identified
the need for complete disclosure of IBM's source code and complete
disclosure of IBM's contributions to Linux. Id. ¶¶ 19-20 ("In
order to fully answer IBM's interrogatories, we require access to the
missing versions of the software. . . ."). While IBM repeatedly makes
reference to SCO's certifications in which SCO stated that it had
responded "fully and in detail" to IBM's discovery requests, see, e.g., IBM Statement
¶¶ 36-37, 40-41, IBM nevertheless consistently ignores that the certifications and the
discovery responses themselves uniformly stated that SCO needed
additional discovery (and, once such discovery was provided, additional
time) to provide any further information. See ¶¶ 45, 57,
49, 54 above.
57. Magistrate Judge Wells thereafter
considered SCO's supplemental responses and SCO's motion to compel
discovery from IBM. By Order
dated March 3, 2004, the Magistrate Judge specifically noted "SCO s
good faith efforts to comply with the Court's prior order," and
accordingly directed IBM to produce necessary discovery (including
prior versions of AIX and Dynix) much of which IBM still has failed to
provide. Exh. 15 at 3 (emphasis added). In that Order, the Court also
recognized that the thirty-day time limitation in its December 2003
Order had made it difficult for SCO to collect all requested documents22 and to
provide further responses to IBM's interrogatories. Id. at 2. Thus, the
Magistrate gave SCO an additional forty-five days to provide further
discovery pursuant to the earlier Order and "to provide and identify
all specific lines of code that IBM is alleged to have contributed to
Linux from either AIX or Dynix," to "identify all specific lines of
code from UNIX System V from which IBM's contributions from AIX or
Dynix are alleged to be derived,"23
to "provide and identify with specificity all lines of code in Linux
that it claims rights to," and to "provide and identify with
specificity the lines of code that SCO distributed to other parties." Id. at 2.24 Again,
however, the Magistrate recognized the limitations on SCO's ability to
provide such information due to IBM's failure to produce the needed AIX
and Dynix source code; indeed, the Court specifically stated that SCO
would only be required to identify those specific lines of code IBM had
contributed to Linux that SCO could identify "at this time." Id. at 2.
58. On April 19, 2004, SCO provided detailed
responses corresponding to each of the items in the Court s March 3
Order. Specifically, SCO provided the additional documents that it had
difficulty in collecting and reviewing during the thirty days following
the Magistrate Judge s December 12 Order. Sontag Decl. (Exh. 18). It
then provided detailed exhibits that answered each of the items set
forth in the Magistrate s March 3 Order. For example, SCO identified
further "specific lines of code that IBM is alleged to have contributed
to Linux from either AIX or Dynix." 4/19/04 Hatch Letter at Tabs B and
C. SCO did so by attaching exhibits further specifying, by file and
line, AIX and Dynix code that IBM had contributed to Linux. SCO's
supplemental discovery represented an additional 21,000 lines of code. Id. SCO was able to provide this
information because IBM had finally produced selected versions of AIX
code and additional versions of Dynix code pursuant to the Court's
March 3, 2004 Order. However, this code was not received in a
usable format - the one both parties had been using throughout the case
- until March 24, so SCO had only a few weeks to undertake the
time-consuming and detailed analysis.
59. Similarly, on the question of the lines of
UNIX System V code from which IBM s Linux contributions from AIX and
Dynix had derived, SCO initially noted that IBM s refusal to provide
the necessary versions of AIX and Dynix made it difficult, if not
impossible, to answer this question in full detail. 4/19/04 Hatch
Letter ¶ 3 (Exh. 19). Nonetheless, SCO responded that AIX and
Dynix, as a whole, are modifications or derivative works based on UNIX
System V,25 and
provided two additional exhibits identifying, by file and lines, the
UNIX System V code that remains in AIX and Dynix and from which AIX and
Dynix are derived. Id.
at Tabs E and F. Again, without being provided access to the evolution
of AIX and Dynix, SCO explained that it could not further answer this
question. Sontag Decl. ¶ 6.
60. SCO also specified additional lines
of code in Linux that it claims rights to. 4/19/04 Hatch Letter
at Tab G (Exh. 19). In addition to the files and lines previously
identified, SCO identified other lines in Linux to which it claims
rights. Id. Because
none of these lines were apparently contributed by IBM, the relevance
of this information was questionable. In any event, SCO attempted to
identify as much as possible under the limited time available.
61. As it has had to do in every discovery
response, SCO noted that it was limited in its responses based on IBM's
failure to provide all requested discovery. Sontag Decl. ¶ 9 (Exh.
18) ("Based on the information currently in SCO's possession, the
answers given and materials produced in response to the Order are given
to the best of SCO's knowledge and are complete, detailed and
thorough."). For these April 19 supplemental responses, SCO only had
the selected snapshots of AIX and Dynix source code and still had not
received any identification of the contributors and specifically what
they had contributed to this source code. Of course, had IBM timely
provided that information, SCO could have used it to decide who to
depose and what other discovery may be necessary, both the support its
own claims and to further respond to IBM's discovery requests. IBM, as
noted, did not provide this information to make this discovery possible
and, even today, after being ordered to do so by this Court has not
provided the necessary materials.26
62. Despite SCO's detailed answers and IBM's
refusal to provide critical discovery, IBM repeatedly claims that
"SCO still has not identified the specific code contained in UNIX
System V that IBM allegedly misused in violation of its licenses to
that software," IBM SJ Mem. at 5, and that "SCO has not identified a
single line of UNIX source code that IBM is alleged to have dumped into
Linux." IBM Statement ¶ 28. But no matter how many times IBM
mischaracterizes it, this case is not about literal copying of UNIX
source code into Linux. Instead, SCO has claimed from the very outset
that IBM's contribution to Linux of the "resulting materials" it
created as modifications to or derivative works based on UNIX System V (i.e., AIX and Dynix/ptx)
constitutes a breach of IBM's licensing agreements, and that by
continuing to use and distribute AIX and Dynix following the
termination of its licenses, IBM's actions constituted copyright
infringement. Second Am. Compl. ¶¶ 173-180 (Exh. 14). Without
full and complete access to IBM's works based on UNIX System V (i.e., AIX and Dynix) and
information about and from the programmers who contributed such code to
Linux, SCO is left to guess as to the origins of large amounts of code
IBM contributed to Linux and obviously would be unable to present to
this Court and ultimately to a jury proof that the code IBM contributed
was in violation of the license agreements.
H. IBM's Mischaracterizations of SCO
s Public Statements
63. IBM's "Statement of Undisputed Facts" also
inaccurately describes public statements made by SCO representatives
outside of this litigation. Contrary to IBM's claim, SCO's
representatives have not "stated" that "it has been the company s
strategy to obfuscate its alleged evidence," IBM Statement ¶ 29,
and SCO has no such strategy. To the contrary, as described above, SCO
has fully complied with its discovery obligations and has, since the
beginning of this litigation, disclosed precisely how IBM has violated
its obligations under the IBM and Sequent license agreements.
64. IBM pulls out of context and misleadingly
abridges a statement made by SCO s Vice President responsible for its
licensing business, Gregory Blepp, in an April 2004 "Spiegel Online"
article. See IBM
Statement ¶ 29. The article quoted Mr. Blepp as saying: "There you don t put
everything on the table at the start, but instead you bring out
arguments and evidence piece by piece." Holger Dambeck, Linux Hunter SCO Puts Everything
on the Line, Spiegel Online (emphasis added) (Exh. 53). As the
article makes clear, Mr. Blepp made that statement in the context of
explaining the procedures that govern "legal actions in the United
States" and the role of confidentiality ("non-disclosure") agreements
in preventing certain information from being released publicly. By
omitting entirely the context of Mr. Blepp s statement, as well as the
word "There" at the beginning of his statement, IBM distorts the
meaning of Mr. Blepp's statement and draws the unjustifiable conclusion
that the statement evinces SCO's "stated . . . strategy to
obfuscate its alleged evidence."
65. IBM also claims that "SCO's counsel
indicated in an interview with Maureen O'Gara of LinuxWorld in March
2003, at the beginning of the case, that SCO 'doesn t want IBM to know
what they [SCO s substantive claims] are.'" See IBM Statement ¶ 29
(alteration in original). A review of this article, however,
demonstrates that the quoted statement on which IBM relies was the
opinion of the author and cannot be attributed to SCO's counsel.
Maureen O'Gara, SCO's Lawyer
Speaks, Says Nothing, LinuxWorld, Mar. 21, 2003 (Exh. 62). That
SCO's counsel would not discuss the substance of SCO's claims with a
reporter no more evinces a design to obfuscate than does IBM's
spokesperson's refusal "to spell out [for The New York Times] what
steps it [IBM] was taking to monitor the technology it contributes to
open-source projects like Linux and to ensure that its Linux
development does not violate the intellectual property rights or
licenses of others" - even though the article revealed that "I.B.M.
contends that these matters will be evidence if the SCO suit goes to
trial." Steve Lohr, No
Concession from I.B.M. in Linux Fight, N.Y. Times, June 14, 2003
(Exh. 58).
ARGUMENT
There are numerous substantive reasons why
this Court should deny IBM's motion for summary judgment on the broad
and complex issues that IBM's copyright counterclaims introduced into
this case less than three months ago. For the reasons discussed below,
IBM's dispositive motion is meritless both (1) as a request for
discovery sanctions under Rule 37(b)(2) and (2) as a motion for summary
judgment under Rule 56.
I. IBM'S REQUEST FOR A
RETROACTIVE DISCOVERY CUT-OFF, AND THE SANCTION OF SUMMARY JUDGMENT, ON
ITS RECENTLY-ADDED TENTH COUNTERCLAIM IS MERITLESS AS A MATTER OF FACT
AND LAW
IBM argues that the Court should enter
judgment on its recently-added Tenth Counterclaim on the ground that
SCO has not identified evidence of Linux-related copyright infringement
by IBM to date, and should not be permitted to do so in the future -
even in response to IBM's early dispositive motion. IBM's motion thus
rises or falls with its claim that SCO should have produced any
evidence relating to copyright infringing materials in Linux - even
though no such copyright infringement claims were in this case until
IBM attempted to add its Tenth Counterclaim on March 29, 2004 - by the
time SCO supplemented its discovery responses on April 19, 2004.
But IBM makes no attempt to show that SCO has
had an adequate opportunity to conduct complete discovery concerning
such issues; indeed, for reasons explained herein, SCO has been
deprived of such an opportunity in large part due to IBM's failure to
supply critical, and courtordered, discovery. Nor does (or can) IBM
identify any information in SCO's possession, custody, or control that
SCO has failed to disclose in response to IBM's discovery requests.
Rather, IBM's dispositive motion is, in
effect, a Rule 37(b)(2) motion for the entry of "sanctions against SCO"
- i.e., by summarily
entering a declaratory judgment for IBM on its wideranging copyright
counterclaim - as punishment for SCO's purported discovery misconduct. Id. at 32-33; see also id. at 7 (arguing that
because of SCO's alleged discovery misconduct, "the fact of IBM's
non-infringement should simply be established against SCO, and SCO
should not even be allowed to adduce evidence on this issue under Rule
37(b)(2)"). IBM requests such sanctions from this Court even though, as
IBM neglects to mention, the Magistrate Judge supervising discovery in
this case - the same Magistrate Judge who has heard all of the issues
presented in IBM's motion and who issued the two orders that IBM claims
SCO has violated - expressly found, when last presented with these
issues in March, that SCO was responding to IBM's discovery requests in
"good faith." 3/3/04 Order at 3 (Exh. 15). Moreover, IBM'on effectively
requests a retroactive cut-off of discovery related to its Tenth
Counterclaim even though (1) this Court just granted SCO's motion to extend, for all issues in
this case, the fact discovery cut-off to February 11 and the expert
discovery cut-off to April 22, 2005; and (2) IBM's motion is based on
the same misguided accusations about discovery conduct that IBM hurled
at SCO when IBM unsuccessfully opposed extension of the discovery
cut-off dates.
The Court should reject IBM's request for the
sanction of summary judgment on its recently-asserted Tenth
Counterclaim because (A) far from acting in bad faith noncompliance of
its discovery obligations - a legal prerequisite to such a sanction -
SCO has diligently complied with its discovery obligations in good
faith; and (B) the extreme dispositive sanction that IBM requests would
be as manifestly unjust and incongruous as it is legally unprecedented.
A. IBM s Misguided Accusations Fail to
Establish Any Discovery Noncompliance, Much Less Bad Faith
Noncompliance, by SCO, A Legal Prerequisite to the Imposition of Any
Dispositive Sanction
1.
SCO Has Complied With
Its Discovery Obligations In Good Faith.
IBM's request for a retroactive discovery
cut-off and dispositive sanctions against SCO is based on its
inaccurate, but repeated, assertions that "SCO has twice certified to
the Court that it has provided complete, detailed, and thorough
responses to IBM's discovery requests and the Court's orders," IBM SJ
Mem. at 23, but that SCO has "consistently refused to provide the
information" sought by two IBM interrogatories "despite two court
orders requiring it to do so." Id. at 2, 7, 26, 32. These
conclusory assertions are blatant mischaracterizations of the discovery
record in this case, as are the factual predicates to those statements,
which IBM inaccurately attempts to portray as "undisputed facts."
As an initial matter, there is no factual
basis for IBM's suggestion that SCO has represented - in its discovery
responses or court-ordered certifications - that SCO has, or has been
able to, provide full responses to IBM's interrogatories concerning
material in Linux to which SCO claims rights. Although SCO has fully
complied with its discovery obligations, and has provided "complete,
detailed, and thorough" responses to all of IBM's discovery requests
based on the information SCO has, SCO has never represented (or been
required to certify) that it has exhausted its information about IBM's
contract breaches.
To the contrary, SCO's investigation of IBM's
improper contributions to Linux is continuing and, in every one of its
discovery responses, including the two certifications that SCO provided
pursuant to the Magistrate Judge's December 12 and March 3 Orders, SCO
has specifically explained that its ability to identify the source code
information that IBM requested has been significantly impeded by IBM's
failure to produce necessary discovery. See Exhs. 4, 5, 13, 17, 18,
S-1. Specifically, SCO has explained that its ability to provide the
discovery IBM seeks has been hampered by IBM's failure to produce
adequate discovery concerning AIX and Dynix source code as well as
design documents, programmer notes, and other information that would
assist SCO in identifying contributions that IBM made to Linux in
violation of the UNIX license agreements.
The two certifications on which IBM relies
were submitted at the Magistrate Judge's direction pursuant to its
December 2003 and March 2004 discovery orders. The Magistrate's
December 12, 2003 Order expressly provided for an explanation, by
affidavit, that SCO did "not have sufficient information in its
possession, custody, or control to specifically answer any of IBM's
requests that are the subject of this order." 12/12/03 Order
¶ 6 (Exh. 10) (emphasis added). Similarly, the March 3, 2004 Order
- in which the Court gave SCO more time to produce additional discovery
and ordered IBM to produce key information SCO needed for its responses
- directed the parties to certify that their answers and
materials provided are given to the best of each parties "knowledge and
are complete, detailed and thorough." 3/3/04 Order at 6 (Exh. 15)
(emphasis added).
But IBM's selective quotation from SCO's
certifications and accompanying affidavits omits the important language
that SCO specifically included to comply with the Magistrate's orders.
For example, while IBM quotes SCO's January 12, 2004 certification as
saying that "SCO has responded fully and in detail to Interrogatories
1-9, 12 and 13," IBM Statement ¶ 36, IBM omits the following key
language from the remainder of that certification:
These
Supplemental Responses, which exceed 60 pages, fully respond to the
interrogatories based on the
information in SCO's possession.
Upon receiving complete discovery from IBM, including all versions of
AIX
and Dynix/ptx, there undoubtedly
will be further evidence of IBM's contractual breaches and other
violations
of law, as detailed in the
attached Declaration of Ryan Tibbitts. Accordingly, SCO reserves the
right to
further supplement or amend its
answers as discovery or further investigation may reveal. Exh.
12 ¶ 1
(emphases added).27
IBM's similar mischaracterization of SCO's
April 19 submission, IBM Statement ¶ 40, neglects to include any
mention of the specific statements therein concerning SCO s need for
further IBM discovery in order to fully answer IBM's interrogatories,
Exh. 18 ¶ 6, as well as the express statement that the answers
given in that submission were "complete, detailed, and thorough" to the
extent that they were "[b]ased
on the information currently in SCO's possession." Id. ¶ 9 (emphasis
added). Thus, contrary to IBM's misguided accusations, SCO's
certifications not only fully complied with the Magistrate Judge's
Orders, but also expressly indicated (as those Orders directed) that
SCO's investigation of IBM's improper contributions to Linux had not
been (and could not be) completed.
Nor is there any other basis for IBM's claims
of SCO's non-compliance with the Court's orders or its discovery
obligations. SCO has diligently complied with its discovery obligations
and, as detailed above, has conscientiously endeavored to respond to
all of IBM's discovery requests. See Statement of Disputed
Facts ¶¶ 45-62. SCO has provided IBM with detailed answers,
to the extent the information was available to SCO, to all of IBM's
interrogatories and other requests, specifically including IBM's
requests for detailed information about the source code in Linux on
which SCO bases its claims in this case. Id. ¶¶ 46, 52,
53, 56, 58. Where SCO could not produce information because IBM had not
provided needed discovery (including earlier versions of AIX and Dynix
and information concerning IBM's contributions and contributions to
Linux), SCO so indicated in its responses. Indeed, the last time these
issues were presented to Magistrate Judge Wells, she expressly found in
her March 3, 2004 Order that SCO had made "good faith efforts to comply
with the Court's prior order." Exh. 15 at 3.
As noted above, SCO provided an additional
supplemental response to IBM's Interrogatories 12 and 13 on April 19,
2004. 4/19/04 Hatch Letter (Exh. 19). In that submission, SCO
identified additional lines of code in Linux to which SCO claims
rights, including specifying, by file and line, over 21,000 lines of
additional code that IBM contributed to AIX and Dynix. Id. at Tabs E, F. SCO had
previously detailed for IBM the specific provisions of the IBM and
Sequent license agreements violated by such IBM contribution, SCO's
Supplemental and Revised Supplemental Responses to IBM's First Set of
Interrogs. 1 and 9, Aug. 4, 2003 (Exh. 4), and in its April 19
submission SCO provided a detailed explanation of how the lines in AIX
and Dynix were derived from UNIX System V. 4/19/04 Hatch Letter ¶
3 (Exh. 19). Moreover, in Exhibits E and F to SCO's submission, SCO
specifically identified all lines of code from UNIX System V from which
IBM's contributions to AIX or Dynix were derived. In Exhibit G, SCO
identified other Linux files and lines to which it claimed rights; even
though this information was of questionable relevance because it had
not apparently been contributed by IBM, SCO attempted to identify as
much as possible under the limited time available. And, as discussed
above, SCO certified, pursuant to the Court's March Order, that
"[b]ased on the information currently in SCO's possession, the answers
given and materials produced in response to the Order are given to the
best of SCO's knowledge and are complete, detailed, and thorough."
Sontag Decl. ¶ 9 (Exh. 18).
In light of the information SCO supplied in
its April 19 submission, there is no merit to IBM's general and
conclusory assertion that SCO's supplemental response failed to
"identify the precise location of all the material in Linux to which it
claims rights," "failed properly to allege the nature of its alleged
rights, including in particular whether and, if so, how the material
derives from UNIX," and "declined to state how IBM infringes SCO's
alleged rights." IBM SJ Mem. at 28. To the contrary, as explained
above, SCO's April 19 submission included precisely that information,
to the extent that SCO could provide it based on the information
available to it. Furthermore, while IBM suggests that SCO could have
provided the supplemental information it supplied on April 19 in
response to the Court's December Order, SJ Mem. 28, the fact is that
SCO was able to provide the supplemental information because, pursuant
to the Court's March 3 Order, IBM had finally produced selected
versions of AIX code and additional versions of Dynix code. Because IBM
did not produce this code until March 24, however, SCO had only a few
weeks to undertake the timeconsuming and detailed analysis required to
respond by April 19. Id.
¶ 60. Moreover, at the time SCO prepared its supplemental April 19
response, SCO still only had selected portions of AIX and Dynix source
code and no information identifying the contributors and what they had
contributed to this source code.
The one, and only, portion of any of SCO s
response about which IBM provides any degree of specification for its
complaint - that relating to the "IRIX/XFS" files that UNIX-licensee
Silicon Graphics (SGI) contributed to Linux - highlights the emptiness
of IBM's position. As to those files, IBM complains that "SCO still
declines to identify the lines of code, as opposed to just the files,
to which it claims rights." IBM SJ Mem. at 28. What IBM ignores,
however, is that because SCO does not have access to Silicon Graphics'
source code, and based its identification of those files on Silicon
Graphics' public statements, SCO could not possibly identify the lines
of source code. In any event, although SCO produced such information
because it was responsive to IBM's very broad discovery requests, it is
difficult to fathom IBM's complaint with respect to this code, given
that another licensee's violation of its UNIX license agreement does
not bear in any way on any of the claims in this case against IBM.
Finally, IBM mischaracterizes the nature of
the discovery at issue based on its repeated mischaracterization of SCO
s complaint. IBM argues:
To establish that IBM 'copied'
protected elements of SCO's alleged copyrights, one critical element SCO
must show is that Linux is
'substantially similar' to the allegedly copyrighted work (here, the
UNIX software),
so that the 'copying' of Linux could
be said to constitute 'copying' of UNIX. This necessarily requires SCO
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 the
Linux code is copied or derives. SJ Mem. at 28 (emphasis added).
But the express premise of IBM's claim (underlined above) is incorrect
because, as explained above, SCO to date has not asserted any copyright
claim against IBM based on copying of code (by IBM or anyone else) to
Linux. See Statement
of Disputed Facts ¶¶ 21, 25-29. Moreover, as further
explained above, none of IBM s claims in this case - which are based on
the license agreements at issue - require SCO to prove copying of UNIX
code (as opposed to code from the UNIX-derived AIX and Dynix flavors)
to Linux. See id. ¶¶ 15-24.
3.
Bad Faith
Noncompliance Is an Indispensable Legal Prerequisite to the Extreme
Dispositive Sanction That
IBM Seeks.
IBM's accusations thus fall far short of
establishing SCO's noncompliance, much less bad faith noncompliance,
with any of its discovery obligations. Such a showing is an
indispensable legal prerequisite to the extreme sanction that IBM
seeks. Because the law favors the resolution of legal claims on their
merits, Meade v. Grubbs,
841 F.2d 1512, 1520 (10th Cir. 1988), dismissal of claims is a strongly
disfavored sanction. As the Tenth Circuit has repeatedly recognized,
"Dismissal under circumstances that defeat altogether a
litigant's right to redress grievances in the courts is a severe
sanction, applicable only in the extreme circumstances [and] should be
used as a weapon of last, rather than first, resort." Gocolay v. N.M. Fed. Sav. &
Loan Ass'n, 968 F.2d 1017, 1021 (10th Cir. 1992) (internal
quotations omitted; alteration in original); Ehrenhaus v. Reynolds, 965
F.2d 916, 920-21 (10th Cir. 1992). It is thus well-settled that a
violation of discovery rules may not justify a dispositive sanction
unless that violation is the result of willfulness or bad faith on the
part of the noncompliant party. Ehrenhaus, 965 F.2d at
920-21 ("[D]ismissal represents an extreme sanction appropriate only in
cases of willful misconduct."); Toma v. City of Weatherford,
846 F.2d 58, 60 (10th Cir. 1988) ("Because of the harshness of
dismissal, considerations of due process require that violation of the
discovery rules is a sufficient ground only when it is a result of
willfulness, bad faith, or [some] fault of petitioner rather than
inability to comply." (internal quotations omitted)).28
B. The Extreme Sanction That IBM Requests
Lacks Any Legal Basis
The impossibility of IBM's position is only
further underscored by controlling law that limits the Court's
discretion under Rule 37(b)(2) to impose discovery sanctions: "First,
any sanction must be 'just'; second, the sanction must be specifically
related to the particular 'claim' which was at issue in the order to
provide discovery." Ins.
Corp. of Ir. v. Compagnie des Bauxites de Guinee, 456 U.S. 694,
707 (1982); see also Myers v. Colgate-Palmolive Co.,
26 Fed. Appx. 855, 862 (10th Cir. 2002) (same); Ehrenhaus, 965 F.2d at 920
(same). IBM's motion makes no effort to apply this test to its request
for the drastic sanction of summary judgment on its Tenth Counterclaim,
and that extreme request does not come close to meeting either of the
Rule 37(b)(2) requirements.
1.
IBM s Motion Ignores,
and Miserably Fails, All Five Prongs of This Circuit's "Just Sanction"
Test.
To assist courts in applying Rule 37(b)(2)'s "just sanction"
requirement, in Ehrenhaus,
the Tenth Circuit outlined the following five factors for
consideration:
(1) the degree of actual
prejudice to the defendant; (2) the amount of interference with the
judicial process; (3) the culpability of the litigant; (4) whether the
court warned the party in advance that dismissal of the action would be
a likely sanction for noncompliance; and (5) the efficacy of lesser
sanctions. 29 965 F.2d
at 920-21 (internal citation and quotations omitted).
See also Rueb v. Morales, 91 Fed.
Appx. 95, 97-98 (10th Cir. 2004) (overturning dismissal sanction where
neither magistrate judge nor district court addressed Ehrenhaus factors). "'Only
when the aggravating factors outweigh the judicial system's strong
predisposition to resolve cases on their merits is dismissal an
appropriate sanction.'" Ehrenhaus,
965 F.2d at 921 (quoting Meade,
841 F.2d at 1521 n.7).
IBM does not even cite Ehrenhaus in its brief, let
alone attempt to
apply its controlling Tenth Circuit test to this case. This is not
surprising, because IBM cannot satisfy any of the Ehrenhaus factors.
First,
IBM does not, and cannot, identify any cognizable prejudice it
has suffered from the discovery certifications it misquotes or the
other conduct it inaccurately describes.30 Second, IBM's misplaced
accusations provide no basis for any finding of "interference with
the judicial process." Interposed for the first time on March 29,
2004, IBM's Tenth Counterclaim is still in the very early stages.
Moreover, given IBM's failure to provide key discovery in this case, it
should not be heard to complain about interference with the discovery
process. Third, as
detailed above in Part I.A, SCO has no culpability,
but rather has acted, and has been found by the Magistrate Judge to
have acted, in "good faith." 3/3/04 Order at 3 (Exh. 15).31
Fourth, the
Court s prior "good faith" finding certainly did
not provide SCO with any warning that summary judgment on IBM's
subsequently-added counterclaim could result if SCO sought to develop
proof to defend against such a counterclaim after it was actually
filed.32 Fifth, IBM has not
addressed lesser sanctions, nor can it provide any rational basis for
concluding that the sanction of summary judgment on its newly added
counterclaim would be necessary in this case.33
The cases on which IBM relies for its
sanctions request only further undermine its argument. See SJ Motion at 32-33. In none of those cases did the
courts find dispositive sanctions to be appropriate, even in response
to a party's proven discovery malfeasance. Burns, 164 F.R.D. 597; Knowlton, 189 F.3d 1177; Volkart Bros., 130 F.R.D.
285. In fact, in two of the three cases that IBM cites, the courts
explicitly rejected
dispositive sanctions. In Knowlton,
the district court concluded that granting the plaintiff's "motion for
default judgment would be too severe a sanction," 189 F.3d at 1182,
while in Volkart Bros.
the court found that default judgment "would be inequitable under the
circumstances of this case." 130 F.R.D. at 290. In the third case, the
court expressly acknowledged that the sanctions it imposed were
"non-dispositive." Burns,
164 F.R.D. at 601.
3. IBM s Requested Sanction Is Not
Even Rationally, Much Less Specifically, Related to IBM's Discovery
Complaints.
IBM's requested sanction also fails the second
prong of the Rule 37(b)(2) test because it is not rationally, much less
"specifically related to the particular 'claim' which was at issue in
the order to provide discovery." Ins. Corp. of Ir., 456 U.S.
at 707; see Olcott v. Del. Flood Co.,
76 F.3d 1538, 1555 (10th Cir. 1996) (same); Okla. Federated Gold &
Numismatics, Inc., 24 F.3d 136, 139 (10th Cir. 1994) (same). As
detailed in Part I.B.1, SCO's alleged (but unsubstantiated) failure to
comply with IBM's discovery requests occurred at a time when this case
did not include any copyright claim or any claim relating to
contributions of UNIX code to Linux, much less a claim (like IBM's
Tenth Counterclaim) involving the propriety of all of IBM's numerous,
varied, and expanding Linux activities.
Not surprisingly, IBM does not cite a single
case in which a court has granted summary judgment for a party on a
claim - much less its adversary's counterclaim - that was not even in
the case at the time of the alleged discovery misconduct. And the cases
IBM does cite are inapposite because, in each such case, the sanction
that the court applied against the offending party's pending claim or
defense was directly related to the discovery request with which that
party had failed to comply. See
Burns, 164
F.R.D. at 596 (finding issue against party who had refused to provide
documents related to that issue); Knowlton, 189 F.3d at 1182
(instructing jury that defendants should be treated as single employer
where defendants had refused to produce evidence on that issue); Volkart Bros., 130 F.R.D.
at 290 (deeming certain paragraphs of plaintiff's complaint about which
defendant had refused to produce evidence to be admitted in order to
"facilitate [the plaintiff's] litigation of this case without the
requested information").
Because IBM's motion for the extreme sanction
of summary judgment finds no support in either the facts of this case
or by any remotely applicable law, it should be denied.
II. EVEN IF CONSTRUED AS A PROPER MOTION FOR SUMMARY JUDGMENT, IBM'S
MOTION FAILS UNDER THE FACTS AND THE WELL-ESTABLISHED LAW
IBM does not remotely satisfy its burden on
summary judgment, and its motion fails for that reason alone. See Part II.A below. SCO
also requests a continuance pursuant to Fed. R. Civ. P. 56(f) and has
filed substantial materials in support of that request. If necessary,
the Court should deny IBM's motion on several, separate bases in light
of the procedural posture of this case, and on the additional grounds
set forth in SCO's 56(f) materials. See Part II.B below. As to
each of those independent lines of authority, IBM's only response is
its contention that SCO represented its previous discovery responses to
constitute all of the evidence SCO could ever find on the subject of
the requests. As shown above, that contention is not at all accurate.
A. IBM Has Failed to Meet Its Burden
of Production on Summary Judgment
"The moving party carries the burden of
showing beyond a reasonable doubt that it is entitled to summary
judgment, and the court must review the record in the light most
favorable to the opposing party." Hicks v. City of Watonga,
942 F.2d 737, 743 (10th Cir. 1991). The moving party "has both the
initial burden of production on a motion for summary judgment and the
burden of establishing that summary judgment is appropriate as a matter
of law." Id.; see also Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986).
"If a moving party fails to carry its
initial burden of production, the nonmoving party has no obligation to
produce anything, even if the nonmoving party would have the ultimate
burden of persuasion at trial." Trainor v. Apollo Metal
Specialties, Inc., 318 F.3d 976, 979 (10th Cir. 2002) (quotation
omitted); see Adickes v. S.H. Kress & Co.,
398 U.S. 144, 160-61 (1970) (holding that plaintiff was not required to
come forward with material supporting her claim because defendant's
initial production had failed to foreclose plaintiff's claim); see also MomsWIN, LLC v. Lutes, No.
02-2195, 2003 U.S. Dist. LEXIS 11713, *16 (D. Kan. July 8, 2003) (Exh.
80) (denying plaintiffs summary judgment motion for declaration
that plaintiffs and one defendant were joint authors of programming
code where plaintiffs did not produce evidence that their contribution
to the code was independently copyrightable).
If the moving party would bear the burden of
persuasion at trial, moreover, the moving party's burden of production
on summary judgment is higher: "If the moving party will bear the
burden of persuasion at trial on the claim addressed by the motion,
that party must support its motion with credible evidence - using any
of the materials specified in Rule 56(c) - that would entitle it to a
directed verdict if not controverted at trial." Anderson v. Dep t of Health &
Human Servs., 907 F.2d 936, 947 (10th Cir. 1990); accord Quaker State Minit-Lube, Inc. v.
Fireman s Fund Ins. Co., 868 F. Supp. 1278, 1287 (D. Utah 1994).34
It has long been settled in the Tenth Circuit
that the declaratory judgment claimant (here, IBM) bears the burden of
persuasion at trial. In Steiner
Sales Co. v. Schwartz Sales Co., 98 F.2d 999, 1011 (10th Cir.
1938), the Tenth Circuit held, in a suit for a declaration of
invalidity as to patents and related license contracts, that the
declaratory plaintiff had the burden of establishing that the contracts
had tended to lessen competition and had resulted in loss or damage to
plaintiff. This decision was followed more recently in Wuv s International, Inc. v. Love
s Enterprises, Inc., No. 78-F-107, 1980 WL 30296 (D. Colo. Nov.
4, 1980) (Exh. 85), a trademark case in which the plaintiff sought a
declaration of non-infringement. Citing Steiner Sales, the court in
Wuv's
recognized: "In this circuit, the plaintiff in a declaratory
judgment action carries the burden of proving its claims." Id.; accord 10B C. Wright et
al., Federal Practice and
Procedure § 2770 (3d ed. 1998) (citing Steiner as standing for the
view, for which "there seems to be a good deal to be said," that "the
party who institutes an action . . . should carry the burden"); Ericsson Inc. v. Harris Corp.,
No. CIVA3:98CV2903D, 1999 WL 604827, at *3 (N.D. Tex. Aug. 11, 1999)
(Exh. 73) (imposing burden of proof on party seeking declaratory
judgment of noninfringement).35
Seeking a summary declaration that none of its
Linux-related activities infringe on any of SCO's copyrights, IBM does
not remotely satisfy its summary judgment burden under Rule 56. As an
initial matter, although IBM asserts in its brief that its Linux
activities "are public knowledge" (SJ Mem. ¶ 30), it does not
anywhere purport even to identify
all of its Linux activities - let alone to describe what they entail.
Nor does the cursory declaration that IBM has supplied from the
cofounder and present director of its Linux Technology Center purport
to supply this critical information. IBM's activities appear to go
beyond those identified in Mr. Frye's declaration, and to be
continually expanding. See
Part III.B.2 below. Without a complete catalog of the activities on
which IBM seeks a declaration of non-infringement, IBM cannot possibly
meet its burden of production on its extraordinarily broad counterclaim.
IBM in effect seeks a clean bill of health for
the entirety of
Linux, including each of its approximately 11,717 individual files and
5 million lines of code. Counter-Statement of Facts ¶ 40. IBM's
role as distributor or end-user of Linux alone would be sufficient to
make IBM liable under black-letter copyright law if Linux contains any infringing content, no
matter what the source of that content. IBM's Tenth Counterclaim
therefore requires a finding that nothing in Linux infringes any
copyright of SCO's. See
17 U.S.C.A. § 106(1) (providing that using or loading copyrighted
material onto a computer constitutes "copying" the program for purposes
of the Copyright Act); Stenograph
L.L.C. v. Bossard Assoc., Inc., 144 F.3d 96, 100 (D.C. Cir.
1998) (interpreting the Copyright Act as holding that loading
copyrighted material onto a computer constitutes "copying"); Vault Corp. v. Quaid Software
Ltd., 847 F.2d 255, 260 (5th Cir. 1988) (same). It follows that
on its motion IBM must at least establish, through credible evidence,
the absence of any material factual issues as to whether Linux contains
any material that infringes a SCO copyright. In fact IBM has not
attempted to make even the most minimal showing that Linux does not
contain material that infringes SCO's copyrights. IBM has not provided
any analysis (expert or otherwise) of Linux and UNIX. Nor has or could
IBM show that reasonable steps were taken to prevent Linux from
becoming polluted by infringing content.
IBM's bare claim that SCO cannot demonstrate
copyright infringement based on IBM's "Linux activities" is not
"credible evidence," but merely conclusory legal argument. Having
failed to meet its initial burden, IBM's summary judgment motion fails
out of the gate. See Adickes, 398 U.S. at 161
("No defense to an insufficient showing is required."); accord Reed v. Bennett, 312 F.3d
1190, 1195 (10th Cir. 2002) (same).
B. IBM s Motion for Summary Judgment
Is Premature Under Federal Rule of Civil Procedure 56(f)
Under Rule 56(f), summary judgment is
premature where "the nonmoving party has not had an opportunity to make
full discovery." Celotex
Corp. v. Catrett, 477 U.S. 317, 326 (1986); see also Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 250 n.5 (1986) (summary judgment should be refused "where
the nonmoving party has not had the opportunity to discover information
that is essential to his opposition"). It is fundamental that summary
judgment is improper "at a stage of the case when all of the facts and
circumstances material to a just determination of the controversy [are]
not before the court." Morrison
Flying Serv. v. Deming Nat l Bank, 340 F.2d 430, 432 (10th Cir.
1965). Summary judgment "is drastic and should be applied with caution
to the end that litigants will have a trial on bona fide factual issues." Id. at 433. Further,
"because the purpose of Rule 56(f) is to provide an additional
safeguard against an improvident or premature grant of summary
judgment, the rule should be applied with a spirit of liberality." King Airway Co. v. Routt County,
No. 97 CJ C.A.R. 563, 1997 WL 186256 (10th Cir. Apr. 17, 1997)
(quotations omitted) (Exh. 77); accord Committee for the First Amendment
v. Campbell, 962 F.2d 1517, 1522 (10th Cir. 1992).
The procedural posture of this case bears
directly on the application of Rule 56(f). See Harrop Decl.
¶¶ 28-29, 35-36. Indeed, when the summary judgment motion is
filed prior to or early in discovery on the claim at issue and the
courts specifically consider the application of Rule 56(f), they have
imposed a reduced burden on the non-moving party:
When the parties have had the
opportunity to conduct discovery, an insistence that one claiming a
need for additional discovery specify the information he seeks and how
it would preclude summary judgment is a sensible requirement. The party
is able to target specific areas of inquiry based on the discovery he
has already conducted and explain why prior discovery was insufficient.
It is unreasonable, however, to demand a detailed explanation of the
evidence the appellants in this case hoped to discover. The appellants
had no real opportunity to conduct discovery and, in terms of
specifying how the desired evidence would preclude summary judgment,
could do little more than state that it was relevant to one of their
theories of recovery. Radich
v. Goode, 886 F.2d 1391, 1403 (3d Cir. 1989) (Hutchinson, J.
concurring in relevant part). 36
In addition, the moving party's exclusive control of information
essential to the non-moving party's opposition "is a factor weighing
heavily in favor of relief under Rule 56(f)." Price v. W. Resources, Inc.,
232 F.3d 779, 783 (10th Cir. 2000) (citation omitted).
SCO shows through accompanying declarations
that it has not had sufficient time since IBM filed its counterclaim to
analyze the millions of lines of Linux source code, to compare it to
UNIX source code, and to trace the geneology, ownership, registration
and licensing of that code.37 Most importantly,
SCO further shows through the declarations that SCO has not received
discovery essential to oppose IBM's motion, nor even basic discovery
that would permit SCO simply to efficiently identify targets for
future, focused discovery and efficient investigation of facts to
oppose IBM's motion. SCO explains below, and the accompanying
declarations set forth in detail, that without such basic discovery
SCO's investigation for non-literal copying would be made much slower
and more inefficient than would otherwise be necessary.
SCO sets forth below examples of copying
discovered to date. SCO does so without waiving other instances of
copying that SCO reasonably expects appropriate discovery to uncover.
The fact is that SCO has not even been given the basic, court-ordered
discovery on which SCO has now been required to renew a motion to
compel necessary to permit SCO to build and prioritize its
investigation of non-literal copying into Linux. SCO submits that
neither logic nor the law requires SCO in such circumstances to submit
a definitive discovery plan now or to make definitive statements about
what is or is not copied now. Otherwise the law would invite defendants
to refuse to produce even rudimentary discovery and then file summary
judgment motions to force their adversary to freeze its case before it
had been given even the beginnings of the information required to build
it.
In fact the law governing summary judgment
motions does the very opposite. While IBM tries to withhold discovery,
slow down the process of investigation, and then cut off the time for
work, the law requires that discovery be used to make the process as
efficient as possible -- and then requires that summary judgment
motions such as the present one in complex software cases involving
non-literal copying be deferred until after the filing of expert
reports (where, even then, they are disfavored).
1. In Conjunction with SCO s Rule
56(f) Materials, The Procedural Posture of the Case Compels Denial Of
IBM s Motion on Several Bases.
The
Parties Have Not Submitted Expert Reports. In evaluating whether
computer programs and/or portions thereof are "substantially similar"
under the Copyright Act, the Tenth Circuit employs the
"Abstraction-Filtration-Comparison" test. Gates Rubber Co. v. Bando Chem.
Indus., Ltd., 9 F.3d 823, 834 (10th Cir. 1993); see also Computer Assocs. Int l v. Altai,
Inc., 982 F.2d 693, 706 (2d Cir. 1992). The test is fact
intensive:
Application of the abstractions
test will necessarily vary from case-to-case and program-to-program.
Given the complexity and ever-changing nature of computer technology,
we decline to set forth any strict methodology for the abstraction of
computer programs. Indeed,
in most cases we foresee that the use of experts will provide
substantial guidance to the court in applying an abstractions test.
Gates, 9 F.3d at
834-35 (internal citation omitted and emphasis added).
The determination of substantial similarity "is primarily a qualitative
rather than a purely quantitative analysis, and must be performed on a
case-by-case basis." Id.
at 839. Further, "because substantial similarity is customarily an
extremely close question of fact, summary judgment has traditionally
been frowned upon in copyright litigation." Sturdza v. United Arab Emirates,
281 F.3d 1287, 1296 (D.C. Cir. 2002) (reversing summary judgment)
(quotations omitted).
The case law demonstrates the impropriety of
summary judgment in copyright cases in which expert reports provide
substantial guidance on the question of substantial similarity. The
parties here indisputably have not submitted expert reports. In fact,
because (among other reasons) SCO's principal claims in this case have
always been for breach of contract and tort, SCO has not yet retained a
testifying expert on copyright issues. See Harrop Decl. ¶ 72.
In Huthwaite,
Inc. v. Sunrise Assisted Living, Inc., 261 F. Supp. 2d 502 (E.D.
Va. 2003), for example, the court considered a suit for infringement of
a copyrighted sales manual. The defendant moved for summary judgment.
Without even mentioning Rule 56(f), the court concluded: "This motion
is premature at this point, as it is brought before the submission of
expert reports on the substantial similarity question." Id. at 511. The rationale
in Huthwaite is even
more powerful here, given the emphasis the Tenth Circuit in Gates and numerous other
courts have placed on expert reports in the context of comparisons
among computer programs. Indeed, in Madrid v. Chronicle Books,
209 F. Supp. 2d 1227 (D. Wyo. 2002), which IBM cites, the court
expressly carved out
the comparison of computer programs as a task the court could not
undertake on summary judgment through a naked comparison of the works
at issue. In comparing the works (a novel and a movie), the court in Madrid explained that it
could resolve the motion before it on summary judgment because "unlike technical computer programs
and like that are copyright protected, the Court does not
require further discovery to compare two literary works that are
expressed in plain English." Id.
at 1234 (emphasis added). The court then noted (the ellipses and
emphases are its own):
See Gates Rubber Co. v. Bando Chemical
Laboratories, Limited, 9 F.3d 823, 831 (10th Cir. 1993), which,
when analyzing a computer program, states that it is "far preferable .
. . in an area of legal and
technological sophistication as complex as this area of copyright
protection, to draw upon a larger arsenal of facts in order to design
or derive the appropriate legally significant facts. Once these are
gathered and expert testimony is heard, the court can then analyze
which portions of the program, according to the expert testimony,
infringes the protected expression." Id. at 1234 n.2.
The copyright issues that IBM's motion raises are of precisely the type
that Gates and Madrid court make clear
cannot be resolved on summary judgment.
Other courts, both within and outside the
Tenth Circuit, agree. In Autoskill,
Inc. v. National Educational Support Systems Inc., 793 F. Supp.
1557, 1568 (D.N.M. 1992), aff'd,
994 F.2d 1476 (10th Cir. 1993), the court noted that reliance on expert
testimony "is particularly appropriate in the complex area of reading
software programs." Accord
Kohus v. Mariol,
328 F.3d 848, 857-58 (6th Cir. 2003); see also Whelan Assocs., Inc. v. Jaslow
Dental Lab., Inc., 797 F.2d 1222, 1232 (3d Cir. 1986) (noting
that "when the subjects of the copyright are particularly complex, such
as computer programs," the applicable analysis of copying must
recognize that "the expert testimony is essential to even the most
fundamental understanding of the objects in question"); Altai, 982 F.2d at 713
(acknowledging "the reality that computer programs are likely to be
somewhat impenetrable by lay observers - whether they be judges or
juries").
The Court should await the submission of
expert reports before resolving the copyright issues raised in IBM's
Tenth Counterclaim.
The
Parties Have Not Remotely Completed Relevant Discovery. IBM
filed its Tenth Counterclaim on March 29, 2004, and fact discovery is
not scheduled to end until February 11, 2005. The parties have not even
begun to take discovery specifically on the Tenth Counterclaim. Harrop
Decl. ¶¶ 35-36, 40, 47-48, 56, 58, 62. SCO does not contend
that the Court may enter summary judgment only if all discovery has
been completed. But see
10B Federal Practice and
Procedure § 2741 ("[T]he granting of summary judgment will
be held to be error when discovery is not yet completed, and summary
judgment has been denied as premature when the trial court determines
that discovery is not finished."). Rather, in factually analogous
circumstances, courts have held that summary judgment motions are
premature.38
It is also undisputed that the parties have
consumed much of the time since IBM brought the Tenth Counterclaim by
addressing for the Court and Magistrate Judge whether the Court shall
have jurisdiction over the Counterclaim at all, the extent to which IBM
has complied with the Magistrate Judge's Order regarding SCO's first
motion to compel, and the scheduling order that this Court amended.
Harrop Decl. ¶¶ 11-17. See Burnside-Ott Aviation Training
Ctr., Inc. v. United States, 985 F.2d 1574, 1582-83 (Fed. Cir.
1993) (denying summary judgment where discovery on the claim was
allowed for only two months and the parties consumed much of that time
moving to extend the discovery deadline and to compel discovery, and
the moving party had not responded to the nonmoving party's discovery
requests). On the basis of those facts alone, pursuant to the foregoing
cases, the Court should deny IBM's motion.
The courts have specifically held, moreover,
that when the non-moving party has had no reasonable opportunity to
take depositions that could provide relevant testimony, summary
judgment is inappropriate. See
St. Surin v. Virgin
Islands Daily News, Inc., 21 F.3d 1309, 1314-15 (3d Cir. 1994)
(reversing summary judgment where the plaintiff had not yet deposed
third-party witnesses); Velikonja
v. Mueller, 315 F. Supp. 2d 66, 79 (D.D.C. 2004) (noting
that in particular, plaintiff has yet to conduct any depositions
); Gallup, Inc. v.
Talentpoint, Inc., No. CIV.A. 00-5523, 2001 WL 1450592, at *14
(E.D. Pa. Nov. 13, 2001) (Exh. 74) (denying summary judgment because
the plaintiff had not been able to depose certain employees of the
defendant). That factor applies with particular force here, for two
principal reasons:
-- In cases involving comparison
of computer programs under the copyright laws, the courts have held
that lay testimony (in addition to expert testimony) is relevant to the
"substantial similarity" inquiry. See, e.g., Whelan Assocs., 797 F.2d at
1232-33; Autoskill,
793 F. Supp. at 1569, aff'd,
994 F.2d 1476 (10th Cir. 1993); and
-- Only by deposing current and former employees of IBM (and its
predecessor in interest) can SCO demonstrate the full extent of IBM's
broad access to UNIX, which proof will reduce SCO's burden on the
question of substantial similarity. See Gates, 9 F.3d at 833 n.7.
IBM improperly presupposes (for example) that no current or former IBM
employee would acknowledge that portions of Linux - including portions
that SCO may not yet have identified - are substantially similar to
portions of protected UNIX material. See Part II.B.2 below.
Additional and analogous case law belies IBM's
argument that deposition testimony would be irrelevant. In Sanders v. Quikstak, Inc.,
889 F. Supp. 128 (S.D.N.Y. 1995), for example, in considering the
defendant's motion for summary judgment regarding the plaintiff's claim
of design defect, the court did not limit its inquiry to whether the
plaintiff could at that time produce direct evidence of the alleged
defect. Rather, the court recognized that prospective deposition
testimony could support the plaintiff's claims:
Defendant argues that plaintiff
should not be given additional time for discovery because plaintiff has
had ample time, during the eleven months since his case was removed to
this court, to inspect the hydraulic unit and to specify the defects he
is alleging. While we wish to encourage the expeditious preparation of
cases for trial, we do not find defendant's argument persuasive.
Inspection of the hydraulic unit is not the only avenue of discovery
through which plaintiff may gain information about the unit.
Depositions of Rexroth personnel may reveal potential design flaws,
manufacturing imperfections, or operating dangers that are not apparent
from a visual inspection or even upon trial runs of the machinery. Id. at 132-33.
SCO indisputably has not yet had the opportunity to depose IBM
employees who could have knowledge about the contribution of
copyrighted SCO System V code into AIX, Dynix, and/or Linux, and has
not yet had the opportunity to depose third-party contributors (such as
Linus Torvalds) who also could have placed System V code into Linux. Sanders and the other cases
cited above make clear that summary judgment is inappropriate where, as
here, future deposition testimony could bear on issues of liability.39
SCO's
Renewed Motion to Compel. Summary judgment is premature when the
non-moving party has filed a pending motion to compel discovery. In Morrison Flying, 340 F.2d
430, the Tenth Circuit - without even mentioning Rule 56(f) - denied
summary judgment where the non-moving party's motion to compel answers
to interrogatories was pending at the time the district court granted
summary judgment. The court's reasoning demonstrates the reduced burden
that the nonmoving party faces in a procedural posture such as the one
here:
We do not conclude that these
questions must be answered or that, if answered, they will finally
permit Morrison to prevail in the case. The trial court should first
have an opportunity to rule upon the matter. Nevertheless, some of this
evidence may be very
material for a final disposition of the litigation. Id. at 432 (emphasis added).
See also Vining v. Runyon, 99 F.3d
1056, 1058 (11th Cir. 1996) (holding that "it is error for a district
court to decide a summary judgment motion before ruling on an
outstanding motion to compel"); Snook v. Trust Co. of Georgia Bank
of Savannah, 859 F.2d 865, 871 (11th Cir. 1988) ("The district
court should have ruled on the motion to compel prior to entering
summary judgment for the defendants. Its failure to rule on the motion
to compel circumvented the policy underlying discovery in cases in
which a summary judgment motion is filed.").
The holdings in these cases are perfectly
sensible - otherwise a litigant would have an incentive to drag its
feet in discovery and then move for summary judgment before the record
was developed in any detail. The reasons for precluding summary
judgment where such motions to compel are pending are manifest in this
case. SCO served interrogatories and requests for production on IBM
over a year ago. Because IBM's responses were incomplete or
non-existent, SCO filed a motion to compel on November 3, 2003. In
March 2004, the Magistrate Judge ordered IBM to comply with its
discovery obligations by providing specified discovery and
supplementing its deficient responses. See Order Regarding SCO's
Motion to Compel Discovery dated March 3, 2004 (Exh. 15). IBM has
failed to comply with the Order. Therefore, SCO has filed a motion to
compel IBM to comply with the Court order prompted by SCO's initial
motion to compel. See
Mem. in Support of Plaintiff's Renewed Motion to Compel, dated July 6,
2004 (Exh. 25).
Accordingly, if the distinct were even
relevant, SCO's renewed motion to compel relates directly back to its
motion to compel pre-dating IBM's motion for summary judgment. The
cases, however, do not distinguish between motions to compel filed
before or after the summary judgment motion. See, e.g., Fernandez v. Bankers Nat l Life
Ins. Co., 906 F.2d 559, 563, 571 (11th Cir. 1990) (reversing
district court for granting summary judgment prior to resolving motion
to compel filed after the motion for summary judgment); Lux v. Cox, 23 F. Supp. 2d
92, 103-104 (W.D.N.Y. 1998) (denying summary judgment motion in light
of motion to compel filed the day before oral argument on the motion).
And there certainly would be no basis for drawing any such distinction
where, as here, the party files the motion to follow up on discovery
ordered in response to a previous motion to compel. See, e.g., G-I Holdings, Inc. v. Baron &
Budd, 213 F.R.D. 146, 146-47 (S.D.N.Y. 2003) (summary judgment
denied as "premature" where the non-moving party has prevailed on a
motion to compel but has not received the discovery to be produced). If
the Magistrate Judge determines to require IBM to produce additional
documents, SCO should be permitted to review and use them.
The courts also have specifically held that
summary judgment is premature when the moving party has failed to
respond to interrogatories. See,
e.g., Sames v. Gable,
732 F.2d 49, 51-52 (3d Cir. 1984) (reversing summary judgment against
plaintiff where "plaintiff's interrogatories remained unanswered by
defendant" and "the court had denied defendants' motion to limit the
scope of those very discovery requests"). SCO demonstrates in its
Renewed Motion to Compel that IBM has failed adequately to respond to
SCO's Interrogatory 5, which seeks the identity of "IBM or Sequent
personnel that work or worked on developing source code, derivative
works, modifications or methods for AIX, Dynix, and Linux, specifying
for each person their precise contributions to each." If IBM answers
this Interrogatory appropriately, SCO will know (for example) the
precise contributions made to AIX and Dynix. Such information would
allow SCO to depose the significant authors of AIX and Dynix, and that
information will enable SCO to streamline and prioritize its searches
for source code in Linux derived over time from source code in UNIX.
That testimony will also provide direct evidence (good or bad) relating
to IBM's request for a declaration of non-infringement with respect to
all of its activities relating to Linux. See Part II.B.2 below. On
these additional bases, the Court should deny IBM's motion.40
2. The Materials SCO Has Filed
Pursuant to Rule 56(f) Further Compel Denial of IBM s Motion.
Under Rule 56(f), the moving party must
identify "the probable facts not available and what steps have been
taken to obtain these facts," and must "demonstrate how additional time
will enable him to rebut movant's allegations of no genuine issue of
fact." Brightway Adolescent
Hosp. v. Health Plan of Nev., No. Civ. 2:98CV0729C, 2000 WL
33710845, *2-3 (D. Utah Sept. 20, 2000) (Exh. 69) (quotations and
citations omitted); see also
Holt v. Wesley Med.
Ctr., LLC, No. 00-1318- JAR, 2002 WL 31778785, at *1 (D. Kan.
Nov. 25, 2002) (Exh. 76) (granting 56(f) continuance in light of
pending and unanswered discovery requests); Am. Maplan, 165 F. Supp. 2d
at 1254-55 (granting 56(f) continuance prior to completion of discovery
where plaintiff "has demonstrated that it has been delayed in obtaining
documents that might prove to be critical in its opposition of
defendant s motion").
SCO's 56(f) submissions fully meet the
foregoing criteria. At the same time, in light of the very early stage
of discovery regarding IBM's Tenth Counterclaim and IBM's failure to
date to provide complete responses to the most basic discovery
requests, SCO need not satisfy the same requirements as a party
opposing summary judgment after substantial discovery on the claim at
issue has been taken. SCO explains below its efforts to take relevant
discovery, the discovery SCO would need to take to oppose IBM's motion,
and illustrative facts demonstrating that SCO reasonably expects to
discover additional facts precluding summary judgment.
SCO
s Discovery Efforts to Date
The procedural posture here is one in which
(i) until February 2004, SCO had not asserted any claim for copyright
infringement in this case, (ii) SCO has not filed any claim that IBM
has contributed source code to Linux in violation of any SCO copyright,
(iii) SCO has not brought any claim in this action against IBM relating
to any of IBM's numerous activities relating to Linux, and (iv) SCO's
motion to dismiss IBM's Tenth Counterclaim is pending -- and, in fact,
IBM filed its motion for summary judgment with its opposition to SCO's
pending motion to dismiss.
By bringing the claims it did, SCO had
specifically avoided the need for the broad and timeconsuming discovery
necessary to determine (by way of example) the full scope of IBM's
numerous activities relating to Linux, the source code thousands of
third parties had contributed to Linux, the origins of the source code
they contributed, the ways in and extent to which thousands of
end-users use Linux, and all of the other discovery necessary to give
SCO an opportunity to discover facts essential to oppose IBM's
Counterclaim. The necessary (and foreseeable) effect of IBM's Tenth
Counterclaim would be to introduce those substantial issues (among
others) into the discovery process. Harrop Decl. ¶ 19.
In addition, SCO has been unable to obtain
facts essential to justify opposition to IBM's motion for summary
judgment given IBM's inadequate responses to basic interrogatories and
requests for production that SCO propounded over a year ago. The
Magistrate Judge has already granted SCO's initial motion to compel
adequate responses to that discovery. On March 3, 2004, the Magistrate
Judge granted SCO's motion to compel and required IBM to provide
specified discovery that it had refused to provide and also to
supplement deficient responses. Yet IBM has still failed to comply with
the Court's Order. IBM's failure has forced SCO to now renew its earlier motion to
compel - simply to secure compliance with the Court's prior Order. See Mem. in Support of
Plaintiff's Renewed Motion to Compel, July 6, 2004 (Exh. 25); see also SCO's Mem.
Regarding Discovery, May 28, 2004 (Exh. 23).
IBM's refusal to provide the basic information
set forth in SCO's Renewed Motion to Compel prejudices SCO's defense of
all of IBM's counterclaims. The effect of IBM's failure adequately to
respond to SCO's discovery requests is to have precluded SCO from
deposing principal programmer contributors to streamline the otherwise
extremely time-consuming investigation and discovery process with
respect to issues of non-literal copying under the copyright laws on
which IBM's Tenth Counterclaim is based. With full discovery responses,
for example, SCO would have known the identities and precise
contributions of each person to AIX, which in turn would have allowed
SCO to take depositions of significant authors of AIX, which would have
provided direct evidence relating to IBM's duplication, modification,
and/or distribution of material in UNIX in which SCO holds copyright.
Harrop Decl. ¶¶ 59-64, 77-90.
After hearing argument on SCO's motion to
compel, the Magistrate Judge also issued a specific numbered directive
requiring that IBM finally produce at least some version of AIX code
(and additional Dynix code). Only on March 24, 2004, almost nine months
after SCO originally requested its production, did SCO finally receive
limited versions of AIX and additional Dynix source code that were
readable so that SCO could begin to conduct source code comparisons.
Comparison of AIX and Dynix source code with source code in UNIX and
Linux will enable SCO to identify the specific files and lines of AIX
and Dynix that IBM contributed to Linux and to continue the complex and
technically demanding analysis to identify all of the instances of
IBM's copying from UNIX into AIX and Dynix and into Linux.
SCO s Proposed Discovery on the
Tenth Counterclaim
IBM's motion begs the question of the full
scope of its "activities relating to Linux," which is an issue on which
SCO has taken very little discovery. In addition to discovery to
determine the nature and scope of IBM's activities relating to Linux,
SCO would need to begin and take substantial discovery of facts
essential to oppose IBM's broad request for a declaration of
noninfringement of SCO's copyrights. IBM seeks a declaration that it
has not infringed SCO's copyrights through any of its "Linux
activities" - as both a contributor and an end-user. IBM of course may
be liable for contributing SCO's copyrighted material from UNIX into
Linux. See, e.g., Gates, 9 F.3d 823. Further,
as an end-user of Linux, if anyone
has contributed protected material from UNIX System V into Linux, IBM
can be held derivatively liable for copyright infringement. See, e.g., Intellectual Reserve, Inc. v. Utah
Lighthouse Ministry, Inc., 75 F. Supp. 2d 1290, 1293-94 (D. Utah
1999).
On the issue of copying, IBM places
near-exclusive weight on SCO's purported ability simply to place the
millions of lines of UNIX source code side-by-side with the millions of
lines of Linux source code and compare them. Such comparisons are possible, but not within
any reasonable time frame. They are in fact an extremely inefficient
and time-consuming way of identifying similarities in code given the
circumstances and the magnitude of the search required. Even using
automated search tools, there are inherent obstacles in identifying all
line-for-line similarities between two computer operating systems.
But as shown below, and demonstrate concretely
in the accompanying declarations, this is even more plainly true as to
issues of non-literal copying, which does not depend on the presence of
identical code and which therefore requires even more time and effort
to investigate. Basic discovery SCO has sought but not received would
have permitted and permit SCO to streamline the investigation of
similarities in code that IBM's Tenth Counterclaim requires, by
enabling SCO to prioritize and target areas to analyze. With such
discovery investigation of non-literal copying is efficient; without it
the investigation is much more time consuming and unnecessarily
inefficient. Given the time constraints and inherent limitations on
side-by-side comparison of source code in the absence of other
information, the means summarized below of identifying copying between
computer operating systems, and of the modification or derivation of
source code from one operating system into the source code of another
operating system, are crucial tools.
IBM thus not only proposes that SCO is
constrained to use only the most time-consuming search
methods, but further proposes that SCO can use only the facts
discovered through those methods before IBM filed its
counterclaim. In a process where the plaintiff seeks to employ the most
efficient means of discovering facts to support its claim, IBM seeks to
constrain SCO to using only inefficient means; where the plaintiff
would develop its case prior to opposing a motion for summary judgment,
IBM proposes to cut that process off entirely. SCO demonstrates below
that on both points the law compels the exact opposite outcome. The law
further demonstrates that the discovery SCO seeks not only is the most
reasonable means of discovering facts on the direct comparison of
source code, but would permit SCO to obtain direct testimony essential
for SCO to oppose IBM s Tenth Counterclaim.41
IBM
s Activities Relating to Linux
IBM's own descriptions of the enormous extent of its worldwide
Linux-related activities reveals the broad scope of the discovery the
Tenth Counterclaim would entail. For example:
As of a year ago, "The company
has 250 developers working on 29 separate Linux projects worldwide,
according to Ken King, director of technical strategy from I.B.M.'s
software group." Harrop Decl. ¶ 37 (quoting No Concession from IBM IN Linux
Fight, N.Y. Times, June 14, 2003)
In light of published reports, moreover, SCO reasonably believes that
it would be entitled to discovery regarding a great deal of subject
matter relating to those activities, such as the following:
-- In 2001, IBM granted $1
billion for the vice president of technology and strategy at IBM to
build a Linux business;
-- In 2003 IBM s Linux-related revenues grew 50% to more than $2
billion. IBM s mainframe hardware business grew 7% to just over $3
billion; that growth is principally attributable to Linux, which
shipped on 20% of the mainframe support IBM delivered in 2003;
-- IBM is helping at least hundreds of third parties migrate their
computers off of other operating systems and onto the Linux operating
system. Since 2001 IBM has trained at least 3000 employees in Linux in
order to launch the practice to help customers migrate to Linux; and
-- IBM has created 45 Linux technology centers in 12 countries, where
experienced engineers with backgrounds designing AIX contribute source
code to Linux.
See Kill Bill, Exh. 52; Harrop
Decl. ¶ 38.
Other published reports also indicate that
IBM's Linux-related activities have grown and expanded and continue to
do so - making SCO's ability now to oppose IBM's request for a
declaration regarding all such activities even more inconceivable. For
example:
-- IBM issued this press release
on January 19, 2004: "IBM today announced new programs and supporting
classes to help Business Partners and customers move from the legacy
Microsoft Windows NT operating system to Linux, the fastest growing
server operating system in the world." (Exh. 45);
-- IBM issued this press release on March 16, 2004: "IBM today
announced new partners, programs and incentives that are helping to
fuel Linux adoption and growth among small-to-medium-sized businesses."
(Exh. 49); and
-- On June 6, 2004, the vice president of technology and strategy at
IBM was quoted as saying: "Linux is helping us win business," and "If
you become convinced that something is going to happen whether you like
it or not, you are far better off embracing it." Kill Bill (Exh. 52).
Harrop Decl. ¶ 39.
Discovery regarding all of IBM's Linux-related
activities would thus be substantial and time consuming. Yet there is
no question that IBM's sweeping Tenth Counterclaim would necessarily
pull those issues into this litigation. That is one reason SCO believes
the Court should not exercise jurisdiction over the counterclaim. If
the Court does exercise jurisdiction, however, SCO would of course ask
IBM to produce at least core documentation of the "activities relating
to Linux" to which IBM refers in its Tenth Counterclaim. SCO would also
depose, for example, the IBM principals who have been identified as
those responsible for the decision to build a Linux business regarding
the nature and extent of IBM's activities relating to Linux. See Harrop Decl.
¶¶ 40, 54.
Discovery to
Determine Identities of Contributors and Contributions to Linux
As a result of how Linux evolved, there is no
"road map" that will allow SCO to trace the migration of UNIX code into
Linux completely. One principal way for SCO to discover some of the
facts essential to oppose IBM's Tenth Counterclaim is to take discovery
to determine who made contributions of source code to Linux, and what
they contributed. To the best of SCO's knowledge, there is no existing
list of all of the contributors to Linux, and no list of any sort that
SCO could reasonably utilize to identify the principal contributors of
such code. SCO does not propose to depose thousands of contributors
worldwide to determine who made material contributions to Linux.
Instead, SCO seeks discovery to pursue reasonable steps to identify at
least the most important contributions made to Linux. Harrop Decl.
¶¶ 41-45; Sontag Decl. ¶ 57.
Depositions
of Contributors to Linux Are Essential
Another principal way for SCO to discover some
of the facts essential to oppose IBM's Tenth Counterclaim is to depose
the persons and entities that contributed source code to Linux. If one
company had compiled Linux, for example, SCO would be permitted to
depose the principal employees who compiled the operating system. Such
depositions will reduce the extremely timeconsuming direct comparisons
of source code that would otherwise be required. Sontag Decl.
¶¶ 24-26, 57-58. This is an especially important form of
discovery that will, SCO believes, lead to the discovery of admissions
of copying of source code, structure and sequence, and/or the
preparation of a derivative work by such contributors. Harrop Decl.
¶¶ 46-54, 73; Sontag Decl. ¶ 59.
SCO has not had the opportunity to depose any of the contributors of any source code into any version of Linux - much
less the major contributors - and therefore has not had any opportunity
to discover admissions highly relevant to IBM's copyright infringement
counterclaim. Indeed, SCO has not had the opportunity to depose even
the person (Mr. Torvalds) who is acknowledged to have compiled the
first versions of Linux - and who indisputably did so after having
studied an operating system expressly based on and derived from UNIX.
Nor has SCO has the opportunity to depose any of the kernel
maintainers. Mr. Torvalds and the kernel maintainers (and there have
been numerous such individuals since at least the mid-1990s) are more
likely than anyone else to be able to help identify who contributed
source code to Linux. Harrop Decl. ¶¶ 46-48; Sontag Decl.
¶ 57.
In addition, many corporations have made
contributions to Linux, and SCO would take discovery on certain of
these companies to determine the sources of their contributions. SCO
also needs to depose the programmers who work for these companies and
made the contributions to determine the sources of those programmers'
code contributions. This discovery will show why the contributions were
made and what features the contributions relate to, and will allow SCO
to trace back from the Linux code to UNIX. Harrop Decl. ¶¶
49-50.
SCO has identified with specificity some
principal authors of various portions of Linux code. Those authors
should know the sources of their code and should be able to provide
information as to whether the code they contributed to Linux was
obtained from SCO copyrighted code. Harrop Decl. ¶¶ 51-53.
Depositions
of Persons with Access to UNIX
Another principal way for SCO to discover some
of the facts essential to oppose IBM's Tenth Counterclaim is to depose
the persons and entities that had access to the UNIX, AIX and/or Dynix
software. (That class of persons of course may overlap with the
individuals described above.) SCO has not had the opportunity to depose
(for example) any of
the persons employed by IBM or Sequent who had access to the UNIX
software, nor any of
the persons at IBM or Sequent who participated in producing AIX and
Dynix, respectively. The depositions of (at least) the principal IBM
and Sequent employees who were permitted to and did access the UNIX
software prior to the advent of AIX and Dynix not only may provide
evidence in support of SCO's claims, but also may permit SCO to
identify other persons who in fact had access to UNIX. That information
will, in turn, permit SCO more reasonably to determine which of the
individuals who had access to UNIX to depose. Harrop Decl. ¶¶
55-58; Sontag Decl. ¶¶ 24-28.
Examination
of Multiple Versions of AIX and Dynix
Another principal way for SCO to discover some
of the facts essential to oppose IBM's Tenth Counterclaim is to examine
the lineages of IBM's programs. SCO can significantly streamline its
efforts to discover facts essential to oppose IBM's Tenth Counterclaim
examining the lineages of AIX, Dynix, ptx, and Dynix/ptx. By examining
the source code in early and then subsequent versions of AIX, Dynix,
ptx and Dynix/ptx, SCO can relate an existing version of AIX, Dynix,
ptx, or Dynix/ptx code to UNIX code. Assuming that Linux code is
similar to AIX. Dynix, ptx, and Dynix/ptx code, SCO can then prioritize
its search effort to find evidence of substantial similarity between
UNIX and Linux code. Without the ability to prioritize its search
efforts, SCO may be required to spend an enormous amount of time, on
the order of 35 man-years, searching Linux code for evidence of
copying. Harrop Decl. ¶¶ 59-65 & Exh. 12 thereto; Sontag
Decl. ¶¶ 15, 29-54.
The evidence SCO currently has - a few
versions of AIX that IBM selected, Linux code, and System V code - is
insufficient to show infringement because IBM could have copied System
V code into early versions of AIX and Dynix and subsequently modified
in the later versions that SCO has. Tracing the derivation of SCO-owned
UNIX code from System V into the code's current form in Linux will be
facilitated by SCO's access to IBM's Configuration Management Version
Control (CMVC) and the versions of AIX, Dynix, ptx and Dynix/ptx.
Sontag Decl. ¶¶ 31-35. IBM has produced only later versions
of AIX. IBM has not yet produced the earlier versions of AIX (or of
Dynix, ptx, and Dynix/ptx). On that basis alone, SCO therefore has not
had the opportunity to discover facts essential to oppose IBM's motion.
Harrop Decl. ¶¶ 61-62.
SCO seeks the following materials to
prioritize its analysis of copying of UNIX code into Linux, and so that
it can rebut IBM's Cross-Motion: (i) all version control system and
bug-tracking information (including documents, data, logs, files, and
so forth) for AIX, Dynix/ptx, ptx, and Dynix from 1984 to the present,
and (ii) source code and log information for all interim and released
versions of AIX, Dynix, ptx and Dynix/ptx from 1984 to the present.
Harrop Decl. ¶ 60; Sontag Decl. ¶¶ 35-36.
The following materials also are relevant to
prioritize SCO efforts to find evidence to rebut IBM's Cross-Motion:
All design documents, white papers and programming notes, created from
1984 to the present. These materials provide a wealth of information
related to code development beyond that which can be found in the
source code testing, VCS and bug-tracking log. Design documents also
list authors of code whom SCO can then depose to help SCO prioritize
its search to find evidence of Linux code that is substantially similar
to UNIX code. Harrop Decl. ¶ 63; Sontag Decl. ¶¶ 50-54.
Further, programming notes contain the thought
processes of individual programmers as they write and revise code
sequences. For example, programming notes often list changes made to
code, and sometimes list additional changes to consider. Thus,
programming notes provide detailed rationale for code changes and an
indication of how the code may change in the future. Programming notes
also list authors of code whom SCO can then depose to help SCO
prioritize its search to find evidence of Linux code that is
substantially similar to UNIX code. Harrop Decl. ¶ 64; Sontag
Decl.¶ 53.
In addition, the examination of the lineage of
any given code sequences faces substantial obstacles as explained
further below. Harrop Decl. ¶¶ 91-95; Sontag Decl.
¶¶ 36-42.
Comparison
of Source Code
Another principal way for SCO to discover some
of the facts essential to oppose IBM's Tenth Counterclaim is to compare
the source code (i) in UNIX and AIX/Dynix, (ii) in AIX/Dynix and Linux,
and (iii) in UNIX and Linux. SCO has not been given a reasonable
opportunity to complete any of the kinds of comparisons necessary to
uncover facts essential to justify SCO's opposition to IBM's motion for
summary judgment. There are inherent limitations on SCO's (and
anyone's) ability to compare source code within a reasonable period of
time. By way of example:
-- Both the UNIX and Linux
operating systems are large and complex computer programs with many
lines of code to compare. Linux code that is modified or derived from
UNIX code may not necessarily bear line-for-line character similarity.
-- To show that Linux code is substantially similar to UNIX code
requires a comparison of that code. In other words, the 4 million lines
of Linux code must be compared with the 3.5 million lines of UNIX code,
line-by-line, or in groups of lines according to the structure,
sequence or function of the group of lines.
-- Attempting to use an automated process to perform a complete
comparison of all of
the source code in UNIX and Linux computer operating systems is not
feasible. -- Because of shortcomings with automated code comparison
processes, SCO and its experts must rely largely on manual comparisons.
Such manual comparisons are very labor and time intensive. SCO and its
experts must know or learn both the UNIX and Linux operating systems in
detail. This process can take many months.
-- To execute the comparison, without some roadmaps or list of "hot
spots" in Linux, SCO and its experts must compare page after page of
code.
The 4 million lines of Linux kernel code takes
up 66,000 pages; the 3.4 million lines of UNIX code takes up 58,000
pages. A simplistic manual comparison would involve placing the pages
of code side by side in some ordered manner and then looking for the
same or similar structure, sequence and organization of the code.
Assuming each page comparison takes one (1) minute, and that there are
66,000 x 58,000 comparisons, this "initial" review could take on
the order of 25,000 man-years. Following the initial review, SCO and
its experts must conduct a detailed comparison of likely copying
candidates. This "second-level" review would also be very lengthy.
Harrop Decl. ¶¶ 66- 67, 91-95; Sontag Decl. ¶¶ 4-23.
As explained above, moreover, IBM indisputably
has not produced multiple early versions of AIX or Dynix source code so
that SCO could compare it with the source code in Linux and SCO's
copyrighted UNIX code. Just as fundamentally, IBM has failed to produce
the discovery that would allow SCO to depose principal programmer
contributors to streamline the discovery process on issues of
non-literal copying. See Harrop Decl. ¶¶ 45, 47, 49, 54;
Sontag Decl. ¶¶ 24-28.
SCO's Proposed Discovery Is Likely
to Create Additional Issues of Fact
Recognition
of Potentially Infringing Material in Linux
The record demonstrates that many individuals
familiar with Linux recognize that source code therein may infringe
SCO's copyrights. SCO submits that such evidence alone establishes that
in proposing to begin and take substantial discovery on IBM's Tenth
Counterclaim, SCO reasonably expects to find evidence to create genuine
issues of material fact regarding IBM's motion for summary judgment.
Harrop Decl. ¶¶ 69-71; Sontag Decl. ¶ 4.
Comparison
of Source Code
In addition to the foregoing, SCO reasonably
expects that further comparisons of source code will permit SCO to
present evidence that creates genuine issues of material fact regarding
IBM's Tenth Counterclaim. Examples of facts from discovery to date that
show copying of material from UNIX into Linux include (i) copying of
SCO's UNIX Executable and Linking Format (ELF) codes in Linux; (ii)
substantial similarity in the Read-Copy-Update ("RCU") routine in Linux
version 2.6.5 and in patches to Linux and the RCU version in SCO's
copyrighted work, specifically UNIX SVR4.2 MP; (iii) copying of UNIX
SMP 4.2 System V initialization (SYS V init) code in Linux version 2.6;
(iv) substantial similarity in the user level synchronization (ULS)
routines in Linux and similar routines in UNIX; (v) copying of SCO's
UNIX System V IPC code in Linux 2.4.20; and (vi) copying of SCO's
copyrighted UNIX "header and interfaces" in Linux. Gupta Aff.
¶¶ 3-86. Another example of the results of SCO's comparison
of source code is the copying of the journaled file system (JFS) module
in IBM's successive later versions of AIX in Linux version 2.6. Id. IBM has not produced
the early versions of AIX, so that SCO cannot (yet) establish how the
JFS in Linux version 2.6 derives from the JFS in UNIX. Harrop Decl.
¶¶ 88-90. The foregoing evidence demonstrates copying from
UNIX into Linux - and is probative even if SCO is not seeking to assert
copyright in the foregoing material. See Gates, 9 F.3d at 833 n.7.
In addition, SCO has not retained a testifying
expert on copyright issues, including the foregoing, because SCO has
filed only a relatively narrow copyright claim in this action and did
so only in February 2004. Such an expert would testify to the relative
importance of the foregoing materials in Linux to the operation of that
operating system. Harrop Decl. ¶ 72. The case law demonstrates
that resolution of the issue of substantial similarity on summary
judgment in this case without consideration of such expert testimony
would be improper. See
Part II.B.1 above. The foregoing examples are themselves sufficient to
create genuine issues of material fact precluding summary judgment on
IBM s Tenth Counterclaim. In addition, they demonstrate that SCO
reasonably expects that further comparison of source code will further
create additional genuine issues of material fact.
The foregoing examples are themselves
sufficient to create genuine issues of material fact precluding summary
judgment on IBM's Tenth Counterclaim. In addition, they demonstrate
that SCO reasonably expects that further comparison of source code will
further create additional genuine issues of material fact.
Depositions
of Contributors to Linux
The depositions of contributors to Linux would
permit SCO to discover facts essential to oppose IBM's Tenth
Counterclaim, and to do so in a way that substantially reduces the
extremely time-consuming direct comparisons of source code that would
otherwise be required. Sontag Decl. ¶¶ 24-26, 46-54, 59,
73-75. SCO reasonably expects that it will discover through such
depositions facts essential to oppose IBM's motion for summary
judgment. In addition to the statements quoted above by others familiar
with Linux, Sam Palmisano, then senior vice president of IBM and now
its Chief Executive Officer, has acknowledged Linux to be "a community
developed version of UNIX." I.B.M.
to Use Linux In Software For Internet, N.Y. Times, Jan. 10, 2000
(Exh. 48). SCO reasonably expects that the depositions of individuals
who (like IBM) acknowledge at the outset that they have participated in
the development of a "version of UNIX" are likely to provide testimony
that would demonstrate (for example) that as a derivative of UNIX,
Linux violates one or more SCO copyrights.
The Linux kernel, for example, uses a ULS
routine to block and unblock access to shared data. The Linux ULS
routine is substantially similar to a ULS routine in UNIX. A Mr. Russel
of IBM helped a Mr. Jamie Lokier contribute the UNIX ULS code into
Linux. If SCO had access to IBM's CMVC, then SCO might have discovered
that Mr. Russel worked on ULS for IBM, and could have deposed Mr.
Russel to determine what specific help he provided in the contribution
of ULS to Linux and to whom he provided that help. Using the CMVC, and
by deposing individuals such as Mr. Russel of IBM, SCO can
significantly reduce the burden of reviewing Linux and UNIX code. Mr.
Russel and other programmers can identify areas of Linux code that are
copies of or are derived from AIX and Dynix code. Mr. Russel and other
programmers can also identify contributors to the Linux code and can
show the necessary access to AIX and Dynix that these contributors had.
Sontag Decl. ¶¶ 24-28.
Depositions
of Persons with Access to UNIX, AIX and/or Dynix
The depositions of persons and entities that
had access to UNIX, AIX and/or Dynix would permit SCO the opportunity
to discover facts essential to oppose IBM's Tenth Counterclaim. As an
initial matter, if SCO presents substantial evidence of IBM's access to
SCO's copyrighted material, SCO faces a reduced burden to produce
evidence of copying in order to create a genuine issue of material
fact. See Gates, 9 F.3d at 833 n.7.
On that basis alone, SCO's ability to prove IBM's full access to the
UNIX source code is a basis for denying IBM's motion. Without such
depositions, moreover, SCO will have no opportunity to discover (for
example) IBM admissions of copying and distribution, which would be
directly relevant to the Tenth Counterclaim. 42 SCO reasonably expects that such
depositions will enable SCO to overcome the otherwise substantial time
restrictions that inhere in comparison of source code, and that SCO
will discover through such discovery facts essential to oppose IBM's
motion for summary judgment. Harrop Decl. ¶¶ 46-57, 59, 73-75.
The
Sequent License Agreement Also Creates Genuine Issues of Fact on the
Issue of Copyright. If the Tenth Counterclaim remains in the
case, SCO's License Agreement with Sequent creates an additional fact
issue precluding summary judgment, because the agreement is ambiguous
as to whether SCO holds copyright to Dynix.
Under its choice-of-law provision, New York
law governs the construction and interpretation of the Sequent License
Agreement. When a contract is ambiguous, such that "the determination
of the parties' intent depends upon the credibility of extrinsic
evidence or a choice among inferences to be drawn from extrinsic
evidence, then the issue is one of fact." Manchester Techs., Inc. v. Didata
Inc., 757 N.Y.S.2d 439, 444 (N.Y. App. Div. 2003) (internal
quotations and citation omitted). The relevant provisions of the
Sequent License Agreement are:
-- Section 2.01, which gives
Sequent the right to prepare derivative works based on System V code,
"provided the resulting materials are treated hereunder as part of the
original SOFTWARE PRODUCT."
-- Sections 6.02 and 6.03, which require Sequent to either return or
destroy "all copies of SOFTWARE PRODUCTS subject to this agreement"
once Sequent's license is terminated (and regardless of whether SCO or
Sequent terminates the license).
-- Section 7.06, which requires Sequent to protect the confidentiality
of "all parts of the SOFTWARE PRODUCTS subject to this Agreement" and
prevents Sequent from disclosing any part (or the entirety) of such
products to anyone other than Sequent employees when such disclosure is
necessary.
The Agreement thus provides that any derivative work based on System V
code is to be treated as a part of System V under the Agreement. In
addition, pursuant to a reasonable reading of Sections 6.02, 6.03 and
7.06, SCO holds copyright in Dynix.
The relevant facts in Liu v. Price Waterhouse LLP,
302 F.3d 749 (7th Cir. 2002), demonstrate why summary judgment for IBM
is inappropriate. Price Waterhouse agreed to provide Xioamei Yang with
access to the copyrighted source code for its computer program
("RevUp32") so that Yang could develop a faster version. The parties
contracted via a Letter Agreement which stated, in pertinent part:
It is clearly understood that
the source code is the sole property of Price Waterhouse and Price
Waterhouse gives no authority, implied or otherwise, to distribute or
copy this source code in any way. Upon completion of the project, ALL
source code will be given back to Price Waterhouse. Id. at 752.
Price Waterhouse then disclosed its "RevUp32" source code to Yang, who
in turn disclosed it to programmers to do the work. Yang and her
programmers completed their work and sent the object code of the
derivative program, "China RevUp32," to Price Waterhouse. Yang refused,
however, to return the source code of the derivative program. Id. Yang assigned the
copyrights to her daughter, Xu Liu, and registered them in Liu's name.
Both parties alleged copyright infringement. The jury found for Price
Waterhouse. The case came before the Seventh Circuit on appeal from a
motion for judgment as a matter of law. See id. at 753-54.
The Seventh Circuit reasoned that Price
Waterhouse, as the holder of the copyright in the original work, had
the exclusive right to prepare derivative works therefrom. See id.; 17 U.S.C. § 106.
The Court explained that under the copyright laws the parties to a
license agreement may provide that the licensee does not obtain
copyright protection in the derivative work. See id. The issue was whether
the Letter Agreement granted copyright in the derivative program to the
licensor (the holder of the copyright in the original program) or the
licensee (the author of the derivative work). The court focused on the
portion of the Agreement stating: "Upon completion of the project ALL
source code will be given back to Price Waterhouse." The court held
that this language was ambiguous as to which party obtained copyright
protection in the derivative work, making the interpretation of the
agreement a question of fact for the jury. See id. at 755. The court
affirmed the verdict holding that Price Waterhouse, the licensor, held
those rights. See id.
Liu
demonstrates that contractual language requiring the return of all the
source code of a derivative program is a sufficient basis for a jury to
infer that the contract grants the full copyright in the derivative
work to the owner of the original work. The Sequent License Agreement
is identical, in all material respects, to the Agreement in Liu. As in Liu, once IBM's use of
System V is terminated, Sequent must return or destroy all copies of
"SOFTWARE PRODUCTS" (i.e. original System V and derivative Dynix) that
it possesses. The Sequent License Agreement also states that no
SOFTWARE PRODUCTS (defined, again, as original System V and
derivative Dynix) are to be copied or disclosed to anyone in any way
that is not authorized under the Agreement.
The Sequent License Agreement is ambiguous on
the question of whether SCO holds the copyright in any version of Dynix
that is a derivative work based on UNIX System V code. The question of
whether SCO holds copyright rights to Dynix would be for the jury.
CONCLUSION
SCO respectfully submits, for the reasons set
forth above, that the Court should deny IBM's Motion for Summary
Judgment on its Tenth Counterclaim.
1 IBM s Linux activities -- which
just last year caused a 50%
increase in IBM's multi-billion-dollar Linux-related revenues -- appear
to be vast and constantly expanding. See ¶ 44, below.
2 IBM's "Statement of Undisputed Facts"
contains numerous improper
conclusions of fact and law, legal argument, and other statements that
are inappropriate under Local Rule of Civil Procedure 56-1(b). Much of
IBM's Statement is rhetoric or legal argument. The following paragraphs
in IBM's "Statement of Undisputed Facts" contain, in whole or in part,
improper legal arguments and conclusions of law: Paragraphs 23-25,
28-30, and 33-48. Genuine issues of material fact also exist regarding
the purported "undisputed facts" in Paragraphs 1-3, 16-17, 19-23, 25,
28-30, 33-34, 36-37, and 39-48 of IBM's Statement. SCO also attaches,
in the Addendum hereto, a chart detailing which paragraphs of IBM's
Statement SCO disputes, and where SCO's response is addressed in this
Memorandum.
3 A computer s operating system manages the
hardware and software
resources of the computer. Essentially, it acts as a link between the
computer hardware and the applications (programs). Sontag Decl. ¶
6.
4 As used herein, "Exh." refers to the
exhibits attached to this brief;
"Harrop Decl." refers to the Rule 56(f) Declaration of John K. Harrop;
"Sontag Decl." refers to the Declaration of Christopher Sontag; and
"Gupta Decl." refers to the Declaration of Sandeep Gupta. Also, "SJ
Mem." refers to IBM's Memorandum in Support of Its Cross-Motion for
Partial Summary Judgment on Its Claim for Declaratory Judgment of
Non-Infringement, and "IBM Statement" refers to IBM's "Statement
of Undisputed Facts" included therein.
5 An operating system is organized into
three layers: applications,
shell, and kernel. Applications include such programs as word
processors and spreadsheets. The shell interprets user commands and
interacts with the kernel. In turn, the kernel is the heart of the
operating system. It interacts with the computer's hardware, schedules
processes, and manages program storage. See Sontag Decl. ¶ 6; SCO Linux Introduction Version 1.2
§ 1-14 (2002) (Exh. S-7).
6 Claims arising out of IBM's violation of
its contractual obligations
as UNIX licensee have always predominated in SCO's complaints. In
addition to contract-related claims - which account for six of SCO s
nine claims in its Second Am. Complaint - SCO s complaints have
asserted claims for interference with business relationships and unfair
competition, which arise out of the same basic facts. See Second Am. Compl.
¶¶ 181-88 (Exh. 14). SCO originally asserted, but later
voluntarily withdrew, a trade secrets claim, and, as explained in
paragraph 15 n.6, SCO added a limited copyright claim in its Second
Amended Complaint based on IBM's use and distribution of AIX and Dynix
following the termination of its license agreements.
7 Specifically, on
February 1, 1985, AT&T and IBM entered into the
following agreements, among others: Software Agreement Number
SOFT-00015 (Exh. 26), Sublicensing Agreement Number SUB-00015A (Exh.
27), and a side letter agreement (Exh. 28). AT&T and Sequent
entered into Software Agreement Number SOFT-000321 (Exh. 30) on April
18, 1985, as well as Sublicensing Agreement Number SUB-000321A (Exh.
31) on January 28, 1986.
8 Section 1.04 of the Software License
Agreements define "Software
Product" broadly: "Software Product means materials such as Computer
Programs, information used or interpreted by Computer Programs and
documentation relating to the use of Computer Programs. Materials
available from AT&T for a specific Software Product are listed in
the Schedule for such Software Product." Exhs. 26, 30. "Computer
Program" is defined in section 1.02 to mean "any instruction or
instructions, in source-code or object-code format, for controlling the
operation of a CPU [which, in turn, is defined in section 1.01 to mean
'central processing unit']" Exhs. 26, 30.
9 Separate sublicensing agreements permitted
UNIX licensees such as IBM
and Sequent to subdistribute computer programs in object-code format
based on UNIX provided that such licensees required their sublicenses
to comply with certain provisions of the Software License Agreements,
specifically including Section 2.01. See Exhs. 27, 31.
10 The IBM Side Agreement, as subsequently
amended, see
Amendment X ¶ 6
(Exh. 29), also differed from the Sequent Software License Agreement in
that it permitted IBM to "develop[ ] or market[ ] products or services
employing ideas, concepts, know-how or techniques relating to data
processing embodied in SOFTWARE PRODUCTS subject to this Agreement,
provided that LICENSEE shall not copy any code from such SOFTWARE
PRODUCTS into any such product or in connection with any such service."
IBM Side Agreement ¶ 9 (Exh. 28). Although this provision amended
and replaced in its entirety paragraph 7.06(a) of the IBM Software
Agreement, it of course had no effect on IBM s obligations under
paragraph 7.01 of that agreement or on any other contractual
obligations of either IBM or Sequent.
11 In addition to IBM's post-termination
use of SCO's copyrighted
materials giving rise to copyright infringement, SCO claims IBM
exceeded the scope of the license in other ways that make IBM liable
for copyright infringement. For example, IBM violated the geographic
limitations of the license when it used UNIX outside the United States
without written permission. SCO alleged in the complaint that IBM used
UNIX in India without such written permission, Second Am. Compl.
¶¶ 114, 147, which results in copyright infringement. See Gilliam v. Am. Broad. Cos.,
538 F.2d 13, 20 (2d Cir. 1976).
12 Although SCO is currently engaged in a
continuing investigation of
improper contributions to Linux, SCO has made clear since at least
SCO's counsel's public comments on November 18, 2003, that its
litigation plan was to identify (at the time, within ninety days) "a
defendant" to "illustrate the nature of the problem," i.e., "a significant user
that has not paid license fees and is in fact using proprietary and
copyrighted material." SCO
Builds 'Significant' War Chest for Legal Fight,
ComputerWeekly.com, Nov. 19, 2003 (Exh. 60). Since that time, SCO has
sued one end-user of
Linux (AutoZone) - "a
defendant" - to "illustrate" the nature of the end-user problem. As
SCO's actions have made clear, it continues to believe that the most
rational route to an overall resolution of this end-user problem is
through negotiation, not broad-based litigation.
13 IBM's motion expressly disclaims any
intention of seeking summary
judgment on the validity or enforceability of SCO's copyrights to UNIX.
See IBM SJ Mem.
at 3 n.3.
14 In addition, as SCO's renewed motion to
compel also addresses, IBM's
overall document production is obviously incomplete as it apparently
omits documents from key members of IBM's Linux group, such as IBM's
Vice President of Technology and Strategy Irving Wladawsky-Berger, as
well as from any of
the members of IBM's Board of Directors (other than an obviously
under-inclusive set of documents from Samuel Palmisano, who is also the
Chief Executive Officer). Renewed Mot. to Compel at 2-5 (Exh. 25).
15 The response to Interrogatory 12
incorporated SCO s response to
Interrogatory 2 and the response to Interrogatory 13 incorporated the
response to Interrogatory 4. These responses similarly noted SCO's need
for additional information from IBM. Exh. 13.
16 SCO was able to identify certain code
that IBM had contributed to
Linux based on the limited public information available.
17 Page 6 of IBM's reply memo also stated
IBM's position as to
precisely what SCO was to provide in response to Interrogatories 12 and
13. Contrary to the characterization in paragraph 34 of IBM's
Statement, IBM's memo did not list matching files and lines of code and
showing derivation by lines of code. Rather, IBM's reply memo simply
stated that it believed that SCO's responses were deficient because SCO
purportedly did not "(1) identify with specificity (by file and line of
code) (a) all source code and other material in Linux to which SCO has
rights and (b) the nature of those rights, (2) how (if at all) IBM has
infringed SCO's rights, and (3) whether, and under what circumstances,
SCO has itself ever made any of the material available to the public."
IBM's Reply Mem. in Support of Second Mot. to Compel, at 6 (Exh. 8).
SCO, as constrained by the limited discovery provided to it by IBM, has
answered these questions as set forth in its January 2004 and April
2004 responses to this requested information.
18 In statements to this Court, IBM has
previously attempted to recast
the stay that the Magistrate imposed in December 2003 in a manner that
places the blame for that stay on SCO. Contrary to IBM s depiction,
however, the simple basis for the stay was the fact that because each
side needed more discovery from the other, the Magistrate concluded it
was "essential to get the ball rolling in this circumstance" and
believed that SCO, as the plaintiff, should go first. 12/5/03 Tr. at
52. Indeed, on March 3, 2004, in addition to lifting the stay, the
Magistrate granted SCO s pending motion to compel and, in numbered
directives, ordered IBM to produce numerous items, including, specific
information concerning the identities of, and contributions from, IBM s
programmers that "work or worked on developing source code, derivative
works, modifications or methods for AIX, Dynix and Linux"; documents
from IBM s top level management; and contact information for IBM s
potential witnesses. 3/3/04 Order (Exh. 15). Because IBM still has not
produced each of these items, they are now the subject of SCO s renewed
motion to compel.
19 SCO supplemented these responses two
days later to identify a filing
system (XFS) that had been contributed to Linux by another UNIX
licensee (Silicon Graphics) in violation of its license agreement.
SCO's Revised Supplemental Response at 61. This identification included
a complete listing of all of the files that comprise this filing system
that appear in Linux, and SCO identified this as code that SCO claims
rights to in Linux. Id.
at 61-66. As detailed in its answer, SCO was able to make this claim
based on public statements Silicon Graphics had made about its
contribution of XFS to Linux. Because SCO is without access to Silicon
Graphics' source code, however, it is obviously impossible for SCO to
identify the lines of the original XFS code that Silicon Graphics
copied directly into Linux. IBM nonetheless proclaims that SCO's
response regarding this unrelated third party's contribution to Linux
is deficient because SCO did not identify line numbers. See IBM Statement
¶¶ 37, 43. Again, IBM is ignoring the fact that without
access to the original source code, identification of line numbers
within source code is impossible. In any event, the code contributed by
another licensee has no bearing on IBM's breach of its license
agreements.
20 IBM ignores SCO's detailed responses,
including its identification
of the lines of code from AIX and Dynix that IBM contributed to Linux,
when it incorrectly claims that SCO "declines" to identify such lines
of code. IBM Statement ¶ 43.
21 IBM claims that even when SCO identified
instances of exact copying
of UNIX System V code into Linux, SCO did not specify the nature of the
rights. IBM Statement ¶ 45. This is wrong. In the example referred
to by IBM, SCO's answer specified that the code had been copied from
UNIX System V by Silicon Graphics in violation of the terms of its UNIX
license. That is certainly specifying the nature of SCO s rights and
how they were violated. Nor is there any merit to the remainder of
IBM's criticisms (set forth in paragraph 45) regarding SCO's purported
failure to specify whether and how IBM or others infringed SCO's
rights, including copyrights. First, at the time of this question,
copyright infringement of any type was not an issue in this case, so
there would have been no reason to discuss such violations of SCO's
rights by IBM. Second, again because copyright infringement was not an
issue in the case, SCO had not undertaken any discovery to determine
what versions of Linux IBM may have been using, copying, or reproducing
and whether such versions included the code in question. Without this
information, SCO could not have provided such disclosure.
22 The record is undisputed that on January
13, 2004, SCO produced to
IBM approximately seventy CDs containing source code for various
products, executive files, press and media documents, Linux sales
invoices, and financial documents filed with the Securities and
Exchange Commission. SCO's Source Log, Exh. 35.
23 This request had not been included in
IBM's interrogatories or in
the Magistrate's December 12 Order.
24 Contrary to IBM's claims, neither of the
Magistrate Judge's December
12 or March 3 Orders directed SCO to "match up the lines of Linux
code to which it claims rights to the specific lines of the UNIX
software code from which the Linux code is alleged to derive." IBM SJ
Mem. ¶ 44 (citing 12/12/03 Order ¶ 4 (Exh. 10)). Rather, the
December 12 Order (to which IBM cites) directed SCO to "identify and
state with specificity the source code(s) that SCO is claiming form the
bases of their action against IBM," Exh. 10 ¶ 4, and the relevant
provision of the March 3 Order directed SCO to "identify all specific
lines of code from UNIX System V from which IBM's contributions from
AIX and Dynix are alleged to be derived." 3/3/03 Order ¶ 4. SCO
provided such detailed answers in its January responses and in its
April 19 update. SCO's Revised Supplemental Response to IBM's First and
Second Set of Interrogatories at 3-30, 40-43, 56-69 (Exh. 5); 4/19/04
Hatch Letter Tabs B-F (Exh. 19). What is also absent from IBM's
Interrogatories and the Court's orders is any directive to "detail
SCO's claims of copyright infringement," IBM SJ Mem. ¶ 33, or to
"describe (let alone detail) how IBM's Linux activities infringe SCO's
alleged copyrights related to the UNIX software." IBM SJ Mem. ¶
37. IBM's statement nonetheless points to these alleged shortcomings
and incorrectly claims that SCO has not complied with its obligations. Id.
25 IBM's memorandum quotes only this single
sentence from SCO's lengthy
response and proclaims it to be insufficient. SCO, however, provided a
detailed explanation of how the lines in AIX and Dynix were derived
from UNIX System V. 4/19/04 Hatch Letter ¶ 3 (Exh. 19). Moreover,
SCO attached charts detailing files and lines of code from UNIX System
V from which AIX and Dynix are derived. Hatch Letter, Tabs E and F
(Exh. 19). None of this information appears in IBM's memorandum.
26 With these same limitations caused by
IBM's failure to provide
complete discovery, SCO more recently filed its amended responses to
IBM's Fourth Set of Interrogatories on June 25, 2004. (The original
responses were filed on May 28, 2004.) As with the SCO's other
discovery responses in the case, SCO noted that its responses to these
two interrogatories were "based on the evidence SCO has discovered
independently and based on information contained in IBM s limited
production to date" and that "[u]pon receiving complete discovery from
IBM, including all versions of AIX and Dynix/ptx, there undoubtedly
will be further evidence of IBM's contractual breaches and other
violations of law." SCO's Am. Resp. to Fourth Set of Interrogatories at
2 (Exh. S-1). Again, within the constraints imposed by IBM's failure to
provide foundational discovery, including but not limited to all
versions of AIX and Dynix, SCO identified, among other items, what the
code identified in its earlier answers constituted (idea, procedure,
process, expression, etc.), the limits on its expression, if any, its
location in the public domain (if at all), and whether it had been
distributed without a copyright notice. IBM has never contacted SCO
about any purported deficiency in these answers.
27 IBM also omits any mention of the
Declaration of Ryan Tibbitts that
accompanied IBM's certification, which further detailed SCO's need for
additional IBM discovery (i.e.,
additional versions of AIX and Dynix and "depositions of IBM
individuals involved in programming the actual Linux modules in
question"). Tibbitts Decl. ¶¶ 14-17, 19-21 (Exh. 12).
28 Indeed, all of the cases cited by IBM
agree that dispositive or
otherwise substantial sanctions are based on bad faith misconduct. See Knowlton v. Teletrust Phones, Inc.,
189 F.3d 1177, 1182 n.6 (10th Cir. 1999) ("'We recognize that dismissal
represents an extreme sanction appropriate only in cases of willful
misconduct.'" (quoting Ehrenhaus,
965 F.2d at 920-21)); Volkart
Bros., Inc. v. M/V "Palm Trader", 130 F.R.D. 285, 290 (S.D.N.Y.
1990) ("It is evident that [the sanctioned party's] non-compliance was
sufficiently 'willful' to authorize the imposition of substantial Rule
37 sanctions."); Burns v.
Imagine Films Entm t, Inc., 164 F.R.D. 594, 598 (W.D.N.Y. 1996)
("Although drastic sanctions such as striking the answer or entering a
default judgment are available, they ordinarily are not imposed unless
disobedience has been willful, in bad faith, or otherwise culpable.").
29 Although Ehrenhaus
upheld the district court's imposition of dispositive sanctions, that
case is readily distinguished because it involved blatant and willful
defiance of multiple court orders. The plaintiff in Ehrenhaus had been ordered
to attend a deposition in a federal courthouse, and the court warned
him that if he failed to attend, he should "expect a motion from the
defendants that [the] case be dismissed for failure to cooperate in
discovery." 965 F.2d at 919. The plaintiff moved for a protective order
to delay the deposition so he could attend a business meeting, but the
protective order was denied and the court again warned him that failure
to attend the deposition would subject him to sanctions under Rule 37. Id. Nevertheless, the
plaintiff failed to appear at the deposition. Id. Indeed, the plaintiff s
behavior in Ehrenhaus
was so extreme that the district court "apparently believed that
dismissal might in fact be too lenient a sanction and that jailing
Ehrenhaus for contempt might be more appropriate." Id. at 922.
30 See Baker v. IBP, Inc.,
No. 02-4067, 2002 U.S. Dist. LEXIS 23869, at *3 (D. Kan. Dec. 5, 2002)
(Exh. 67) (finding dismissal improper where "the degree of actual
prejudice to the Defendant is low"); Resolution Trust Corp. v. Williams,
162 F.R.D. 654, 661 (D. Kan. 1995) (refusing to strike plaintiff's
pleadings even though plaintiff had failed to produce court-ordered
documents where there was no prejudice in light of court's extension of
discovery period); see also
Quinn v. City of Kansas
City,
64 F. Supp. 2d 1084, 1095 (D. Kan. 1999) (refusing to dismiss
plaintiffs claims even though plaintiff had provided false testimony
because defendants were not prejudiced in their ability to present
their case at trial).
31 See Biocore Med. Techs., Inc. v.
Khosrowshahi,
No. 98-2031, 1998 U.S. Dist. LEXIS 20512, at *18 (D. Kan. Nov. 6, 1998)
(finding dismissal inappropriate where violations did "not involve bad
faith, fault, or a willful violation" because defendant had no
intention to violate scheduling order).
32 See, e.g., Zhou v. Pittsburg State Univ.,
No. 01-2493, 2003 U.S. Dist. LEXIS 1355, at *20 (D. Kan. Jan. 29, 2003)
(Exh. 87) (refusing to dismiss plaintiff's suit even though first three
Ehrenhaus
factors were
satisfied, and even though plaintiff had been warned that continued
failure to appear for scheduled depositions may result in "sanctions,
up to and including dismissal of the case with prejudice," because
warning contained some ambiguity); Resolution Trust Corp.,
162 F.R.D. at 661 (refusing to strike plaintiff's pleadings even though
plaintiff had failed to produce court-ordered documents required by the
scheduling order where "there was no warning afforded for the conduct
in issue").
33 See Cuenca v. Univ. of Kan.,
No. 98-4180, 2001 U.S. Dist. LEXIS 9942, at *10 (D. Kan. May 14, 2001)
(Exh. 71) ("Not convinced that the defendants "conduct even warrants a
sanction, the court cannot rule out the efficacy of lighter
sanctions."); see also, e.g.,
Baker,
2002 U.S. Dist. LEXIS 23869, at *3 (holding that dismissal was improper
where "Defendant provides no reason why lesser sanctions would not
accomplish the stated goals"); Hite v. PQ Corp.,
No. 98-2088, 1998 U.S. Dist. LEXIS 19933, at *8 (D. Kan. Dec. 10, 1998)
(Exh. 75) ("The court finds no substantial prejudice to defendant which
cannot be alleviated by imposition of lesser sanctions. In such a case,
the remaining factors generally lose much of their importance.").
34 Accord Timmer v. Mich. Dep't of Commerce,
104 F.3d 833, 843 (6th Cir. 1997); Smith v. City of Des Moines, Iowa,
99 F.3d 1466, 1471 (8th Cir. 1996); Fitzpatrick v. City of Atlanta,
2 F.3d 1112, 1115 (11th Cir. 1993).
35 The only Tenth Circuit case that IBM
cites, Lefler v. United
Healthcare of Utah, Inc.,
162 F. Supp. 2d 1310, 1314-15 & n.6 (D. Utah 2001), involved
neither the Copyright Act nor the Declaratory Judgment Act, but instead
concerned particular standards enumerated in the ERISA statute. See id. at 1316. The other two
cases, Interactive Network,
Inc. v. NTN Communications, 875 F. Supp. 1398, 1403 (N.D. Cal.
1995), and Larami Corp. v.
Amron,
No. Civ. A. 91-6145, 1993 WL 69851 at *3 (E.D. Pa. Mar. 11, 1993) (Exh.
78), involved counterclaims for infringement that were the mirror
images of the plaintiffs' preexisting declaratory judgment claims for
noninfringement. Those cases show at most that the burden of proof may
shift to a declaratory defendant only when it asserts such a
mirror-image claim. See
Reliance Life Ins. Co.
v. Burgess,
112 F.2d 234, 239 (8th Cir. 1940) (where defendants did not seek
affirmative relief in response to plaintiff's declaratory judgment
claim, plaintiff retained burden of proof). But see Ericsson,
1999 WL 604827, at *3 (Exh. 73) ("Merely because Harris [the
declaratory defendant] is now asserting infringement counterclaims does
not remove the burden of proof from Ericsson on its declaratory
judgment claim."). SCO alleges that IBM violated SCO's copyrights by
continuing to use and distribute AIX and Dynix after the termination of
IBM's licenses. See
Statement of Disputed Facts ¶¶ 26-28, above. IBM's election
to seek
much broader relief in its Tenth Counterclaim comes with a price: the
burden of persuasion at trial and the burden of producing credible
evidence to support its summary judgment motion. In any event, to the
extent that Interactive
Network and Larami
conflict with Steiner Sales
and Wuv's, they do
not apply.
36 See, e.g., Am. Maplan Corp. v. Heilmayr,
165 F. Supp. 2d 1247, 1254 (D. Kan. 2001) ("The court also notes that,
unlike most Rule 56(f) requests that are made after the close of
discovery, the discovery period in this case has not yet closed."); Superior-FCR Landfill, Inc. v.
County of Wright,
59 F. Supp. 2d 929, 936 (D. Minn. 1996) (denying motion for summary
judgment because, although the non-moving party should have filed a
Rule 56(f) affidavit, the "motion was filed at an early stage of the
proceedings" and the court would allow plaintiff "the opportunity to
conduct discovery"); cf.
Harris v. City of
Seattle,
315 F. Supp. 2d 1112, 1120 (W.D. Wash. 2004) ("This is not a situation
in which defendants file a summary judgment motion before plaintiff has
had a full opportunity to pursue discovery and obtain the evidence
necessary to defeat a summary judgment motion.").
37 Although IBM excludes from its present
motion issues of ownership,
SCO's investigation would nevertheless need to encompass such issues.
There is also a fact issue as to whether SCO owns copyright in one of
the two IBM programs at issue in the case. See Part II.B.2 below.
38 See, e.g., Rio Vista Oil, Ltd. v. Southland
Corp.,
667 F. Supp. 757, 760 (D. Utah 1987) ("motions for summary judgment
should not be granted if discovery has not been had and would be
helpful"); see also Velikonja v. Mueller,
315 F. Supp. 2d 66, 80-81 (D.D.C. 2004) (noting the "undeveloped
record" and holding that consideration of any summary judgment would
occur after discovery was completed); Does v. Mercy Health Corp. of
Southeastern Pa.,
150 F.R.D. 83, 85 (E.D. Pa. 1993) (granting Rule 56(f) continuance
where "Defendants submit this motion for summary judgment in the early
stages of discovery"); Magic
Mktg., Inc. v. Mailing Servs. of Pittsburgh,
634 F. Supp. 769, 772-73 (W.D. Pa. 1986) (considering defendant
American Paper's motion for summary judgment in action for copyright
infringement and concluding that "Discovery has recently commenced and
plaintiff must be given an opportunity to uncover evidence which may
contradict American Paper's position").
39 IBM relies on Gemisys Corp. v. Phoenix American,
Inc., 186 F.R.D. 551 (N.D. Cal. 1999), but at the time of
summary judgment in that case the Magistrate Judge had previously granted the
non-moving party's Rule 56(f) motion and permitted it to depose
numerous witnesses from the moving party. See id.
at 565. In addition, the non-moving party's subsequent Rule 56(f)
motion either sought only the right to depose individuals it had
already deposed or else was based purely on "mere speculation." Id. at 565-66. Nor did the
non-moving party present any evidence of substantial similarity. See Part II.B.2 below.
40 The other cases IBM cites are not at all
to the contrary. In Jean v.
Bug Music, Inc.,
No. 00 CIV 4022, 2002 WL 287786 (S.D.N.Y. Feb. 27, 2002), the court
relied extensively on the declaration and deposition testimony of the
defendants' expert. Id.
at *3-6. In I.A.E., Inc. v.
Shaver,
74 F.3d 768, 778 (7th Cir. 1996), which turned on the application of
Indiana law to an implied license, the court had the benefit of
extensive discovery, including a variety of depositions. In Scholastic, Inc. v. Stouffer,
221 F. Supp. 2d 425 (S.D.N.Y. 2002), the court premised its grant of
summary judgment on the fact that the alleged infringer did not have
access to the protected work. Id.
at 339. In CACI Int l, Inc.
v. Pentagen Tech. Int l, Ltd. 70 F.3d 111 (Table), 1995 WL
679952 at **3 (4th Cir. 1995), the court granted summary judgment
because, inter alia,
the statute of limitations had run. Further, the undisputed evidence
demonstrated that the alleged infringer did not have access to the
copyright holder's work and had not distributed it.
41 See, e.g., Williams v. Arndt,
626 F. Supp. 571, 579-81 (D. Mass. 1985) (in finding substantial
similarity during bench trial, considering the defendant's testimony in
evaluating his credibility, motivation and purpose for creating the
substantially similar work); Midway
Mfg. Co. v. Bandai-America, Inc.,
546 F. Supp. 125, 153-54 (D. N.J. 1982) (in finding issues of material
fact precluding summary judgment, citing defendant's later-rescinded
decision to include another feature of the copyrighted work in the
defendant's work, and the testimony of the creator of defendant's work
that the work is similar to the plaintiff's work); cf. Plains Cotton Co-op Ass n of
Lubbock, Tex.. v. Goodpasture Computer Serv., Inc.,
807 F.2d 1256, 1260- 61 (5th Cir. 1987) (affirming district court's
decision that plaintiff was unlikely to succeed on the merits in
copyright action and citing as relevant evidence defendant's testimony
"that he did not rely on any material" belonging to plaintiff, his
familiarity when designing defendant's work based on "just experience
and industry knowledge," and the testimony of an employee of defendant
that the program subroutines he wrote for defendant while employed
there "were written without reference to any material relating to any
of" plaintiff's software systems).
42 See, e.g., Adobe Sys. Inc. v. One Stop Micro,
Inc.,
84 F. Supp. 2d 1086, 1093 (N.D. Cal. 2000) (evidence supporting summary
judgment for plaintiff included defendant's admissions of distribution
of copyrighted material); Dynamic
Microprocessor Assocs., Inc. v. EKD Computer Sales & Supplies Corp.,
No. 92-CV- 2787 (FB), 1997 WL 231496, at *15 (E.D.N.Y. Apr. 14, 1997)
(Exh. 72) (evidence supporting summary judgment for plaintiff included
defendant's acknowledgement of plaintiff's copyright and admission of
distribution of copyrighted material); In re Independent Serv. Orgs.
Antitrust Litig.,
910 F. Supp. 1537, 1540 (D. Kan. 1995) (evidence supporting preliminary
injunction included defendant's deposition admissions that they were
copying plaintiff's copyrighted materials); Peer Int l Corp. v. Luna Records,
Inc.,
887 F. Supp. 560, 566 (S.D.N.Y. 1995) (evidence supporting summary
judgment for plaintiff included defendant's admissions that it
continued to distribute plaintiff's copyrighted material without a
license); Zeon Music v.
Stars Inn Lounge, Ltd.,
No. 92 C 7607, 1994 WL 163636, at (N.D. Ill. Apr. 28, 1994) (Exh. 86)
(evidence supporting summary judgment for plaintiff included deposition
admissions of the distribution of plaintiff's copyrighted material).
|