decoration decoration
Stories

GROKLAW
When you want to know more...
decoration
For layout only
Home
Archives
Site Map
Search
About Groklaw
Awards
Legal Research
Timelines
ApplevSamsung
ApplevSamsung p.2
ArchiveExplorer
Autozone
Bilski
Cases
Cast: Lawyers
Comes v. MS
Contracts/Documents
Courts
DRM
Gordon v MS
GPL
Grokdoc
HTML How To
IPI v RH
IV v. Google
Legal Docs
Lodsys
MS Litigations
MSvB&N
News Picks
Novell v. MS
Novell-MS Deal
ODF/OOXML
OOXML Appeals
OraclevGoogle
Patents
ProjectMonterey
Psystar
Quote Database
Red Hat v SCO
Salus Book
SCEA v Hotz
SCO Appeals
SCO Bankruptcy
SCO Financials
SCO Overview
SCO v IBM
SCO v Novell
SCO:Soup2Nuts
SCOsource
Sean Daly
Software Patents
Switch to Linux
Transcripts
Unix Books
Your contributions keep Groklaw going.
To donate to Groklaw 2.0:

Groklaw Gear

Click here to send an email to the editor of this weblog.


Contact PJ

Click here to email PJ. You won't find me on Facebook Donate Paypal


User Functions

Username:

Password:

Don't have an account yet? Sign up as a New User

No Legal Advice

The information on Groklaw is not intended to constitute legal advice. While Mark is a lawyer and he has asked other lawyers and law students to contribute articles, all of these articles are offered to help educate, not to provide specific legal advice. They are not your lawyers.

Here's Groklaw's comments policy.


What's New

STORIES
No new stories

COMMENTS last 48 hrs
No new comments


Sponsors

Hosting:
hosted by ibiblio

On servers donated to ibiblio by AMD.

Webmaster
Red Hat and Novell Also File Motion to Dismiss Wallace
Wednesday, July 06 2005 @ 09:56 PM EDT

Red Hat and Novell have filed a Motion to Dismiss [PDF] Daniel Wallace's lawsuit, with prejudice. What? You are surprised?

: )

Here's the Memorandum in Support [PDF]. The court had granted their request for more time to answer, and the deadline was today. My thanks to the wonderfully fast *and* careful Henrik Grouleff, for the text.

The memorandum says that Red Hat and Novell join in IBM's arguments in their Motion to Dismiss, but they add one statement of reasons the Complaint should be dismissed with prejudice: "The Complaint Fails to Allege a Violation of the Sherman Act." Duh.

First, they argue, he failed to allege a per se case; it's Rule of Reason, and with Rule of Reason you have to allege "effects in a relevant market". The plaintiff "conspicuously fails to allege any effect on anyone other than himself." On top of that, he lacks standing, they conclude, because he hasn't suffered an "antitrust injury."

Then, just in case Mr. Wallace wants to argue some more and try to say it is per se, they add these paragraphs:

First, in Atlantic Richfield Companies v. USA Petroleum Company, 495 U.S. 328 (1990), the Court held that a competitor who alleged that he lost profits due to his competitor's vertical maximum price fixing scheme lacked standing to sue under the antitrust laws. A review of the terms of the GPL, specifically Section 2(b), disclosed that the Plaintiff has no standing to bring this Complaint, even if the alleged vertical maximum price fixing agreement were per se unlawful, which after State Oil v. Khan it plainly is not.

The fact that Plaintiff seeks only injunctive relief, rather than damages, does not save the Complaint from dismissal. In Cargill, Inc. v. Monfort of Colorado, 479 U.S. 104 (1986), the court held that antitrust injury requirement applies equally to plaintiffs seeking injunctive relief under Section 16 of the Clayton Act.

In short, under State Oil v. Khan, Plaintiff has not alleged a substantive violation of the Sherman Act. Moreover, under the Brunswick, Richfield, and Cargill cases, Plaintiff has not alleged any actual or threatened "antitrust injury" of the sort that would give him standing to sue. Therefore, even in Plaintiff had stated the elements of an antitrust violation -- which he has not -- the Complaint should still be dismissed.

Wallace has filed a Motion to Amend Complaint [PDF] in this case, presumably to try to fix the flaws that have been pointed out to him. He says he is filing pro persona, which means nothing that I know of, saying that he wants to amend "on the ground that justice will be fully served."

I don't know about that. How just is it to bring meritless claims that can't prevail but can annoy and harass? Then he signs off as pro se, which does mean something, so he knew the correct term. I continue to suspect an attempt to cynically play the judge, hoping to get all the breaks that an incompetent with no lawyer might get from a sympathetic judge. We'll see if it works. It won't if justice is fully served.

Oh, he has filed another Motion to Amend [PDF] the FSF complaint too. That would be the third time already, I think. It's like ping pong, this Wallace litigation, not a lawsuit. He files, his victims point out his mistakes, and then he alters his story to suit what he has learned is required. It's like going to law school the stupid way. A little theory first is a lot less painful.

But What's an "Anti-Trust Injury"?

I'll let Microsoft and IBM help me explain. Microsoft's Steve Ballmer has just said publicly that the cost of acquisition for Linux is less than for Windows but the total cost of ownership is actually less for Windows:

Because open-source products can, in general, be downloaded for free, Microsoft has to compete against them by drawing attention to the "total cost of ownership." It must make the case that, all things considered, Windows applications are cheaper over the long term.

Open source "is the first competitor we've ever had where our cost of acquisition is higher than their cost of acquisition," said Microsoft CEO Steve Ballmer. "Usually, we're able to come in and say, 'We're cheaper and better'...Here we have to say, 'lower total cost of ownership--and better.'"

I don't believe that, and you don't either, but it stands as their position for court purposes. They can't have it both ways. If the GPL results in software that actually costs more, despite being available for free, Mr. Wallace's posited injury doesn't exist, does it? Sorry, but that's what hahppens when you make foolish claims in public. Ballmer should have learned from what happened to Darl.

But note something else that will help you understand what an antitrust injury consists of, something IBM argued in its Motion to Dismiss:

Second, the alleged injury is not the type of injury Congress intended to protect against in passing the antitrust laws, so plaintiff cannot show the requisite antitrust injury. Plaintiff's alleged harm flows only from additional competition in the marketplace, which is not the sort of harm with which the antitrust laws are concerned. Plaintiff therefore has no standing to bring his claims and his case should be dismissed. . . .

The plaintiff alleges he is a competitor who may be harmed in the future because of increased competition. This is not the type of harm the antitrust laws were designed to prevent, and the complaint should therefore be dismissed with prejudice. . . .

B. Plaintiff Lacks Antitrust Injury.

In addition to showing a nexus between the alleged anticompetitive acts and the alleged harm, a plaintiff must also show an antitrust injury — that is, the type of injury the antitrust laws were designed to prevent. It is now axiomatic that "[t]he antitrust laws . . . were enacted for 'the protection of competition, not competitors.'" Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 488 (1977) (citation omitted).

The required showing of antitrust injury applies to the per se analysis as well as the rule of reason. In Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328 (1990), the Supreme Court held that a competitor who alleged only that he had lost sales and profits due to his competitor's vertical maximum price fixing scheme lacked the requisite antitrust injury to sue under the antitrust laws, regardless of whether a per se violation had been alleged. . . .

The injury alleged by the plaintiff in this case is not the requisite "antitrust injury." He does not allege an injury to competition or to the market, but only to himself as a competitor or potential competitor. His alleged lack of "opportunity" for him to "earn future revenue" is focused on his own income, not any injury to competition or consumers. Common sense dictates that a "licensing scheme" that requires consumers pay no more than zero dollars to use and copy the programs under the License would benefit consumers, not harm them, and any "injury" flowing from there could not be an "antitrust injury."

Plaintiff apparently alleges that he cannot compete because he is not able to earn income by licensing to others any modifications he made to a program he obtained for free under the License, given that all such modifications must also be licensed at no charge. This allegation also clearly fails the antitrust injury test. Here, even assuming plaintiff charged for distribution or servicing of the program (acts not prohibited by the License), plaintiff's potential customers would benefit from lower prices for licensing the modified program (i.e., no cost for the actual use of the program) compared with the price they would have to pay if plaintiff were permitted to charge for the license. Even if plaintiff were "injured" by his inability to license his modifications for a fee, it would not be the type of injury to competition Congress envisioned for the antitrust laws.

The article that quoted Mr. Ballmer provides a real-world example of what IBM was describing in legalese. The CNET News.com article, entitled "Microsoft looks to extinguish LAMP," says that the combination of Linux, Apache, MySQL, and scripting lanuages like PHP, Perl, and Python (LAMP), is eating Microsoft's lunch, or at leasting cutting into it, so Microsoft is planning to "heap features into its low-end products" and build a "comprehensive set of tools -- spanning development to management" to try to make their server more attractive. So, does that hurt consumers, or benefit them?

Do you see now what IBM's lawyers meant in their motion to dismiss Daniel Wallace's lawsuit regarding the GPL, when they pointed out that there was no antitrust injury, because competition from GPL code is *benefiting* the consumer, not damaging them, regardless of what it may or may not be doing to Wallace personally?

I'm sure Daniel Wallace will be relieved to hear that Microsoft has spelled out how well it can compete against a product that can be downloaded for free. Its senior vice president of server applications tells the world how in the same article:

Having products that are engineered to work together--something open-source competitors cannot do--will ultimately make Microsoft products easier to run and more cost-effective over time, said Paul Flessner, senior vice president of server applications.

"You can compete with an acquisition price of zero if, over the lifetime, you have a lower total cost of ownership. I think it will be very difficult for them to emulate, honestly, given their economic models," Flessner said. "I feel good about the low-end assault from freeware."

Memo to the court hearing Mr. Wallace's antitrust complaints: the chief "victim" of the GPL, according to Mr. Wallace, says it has no trouble competing with GPL products. Just so you know.

Of course, Mr. Flessner is wrong about open source being unable to make applications work together. But let's let him find out the hard way, shall we? Meanwhile, the headline says it all, to me. It is actually Microsoft trying to "extinguish" its competition. The LAMP stack doesn't care about competition and isn't trying to extinguish Microsoft. It's a by-product of some very fine code written by some mighty ethical people up against code from a company nobody much trusts any more. And after watching all the pro-Microsoft litigation, do we trust them more or less?

Speaking of consumers, I learned something about Microsoft's new low-end XP for the third world. You can only open three windows at a time. Can you imagine? And Wallace thinks GPL code is harming consumers? He should take a look at that. Why would anyone in the world choose that over a GNU/Linux system, which enables you to be the master of your own computer and do anything you like with the code, open anything, do anything, whatever you please, all the things everyone else in the world can do, with no mother-may-I?

This, of course is the piece Wallace can't fix about his complaint, no matter what stories he tells next. Consumers are benefitting. Period. And that does not an antitrust injury make. Here are the main cases that IBM, Red Hat and Novell cite and what they held:

Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.:
"A private plaintiff seeking injunctive relief under 16 must show a threat of injury 'of the type the antitrust laws were designed to prevent and that flows from that which makes defendants' acts unlawful.'"

Atlantic Richfield Co. v. USA Petroleum Co.:

"USA's argument that, even if it was not harmed by any of the Albrecht anticompetitive effects, its lost business caused by ARCO's agreement lowering prices to above predatory levels constitutes antitrust injury is rejected, since cutting prices to increase business is often the essence of competition. . . .
"A loss flowing from a per se violation of 1 does not automatically satisfy the antitrust injury requirement, which is a distinct matter that must be shown independently. The purpose of per se analysis is to determine whether a particular restraint is unreasonable. Actions per se unlawful may nonetheless have some procompetitive effects, and private parties might suffer losses therefrom. The antitrust injury requirement, however, ensures that a plaintiff can recover only if the loss stems from a competition-reducing aspect or effect of the defendant's behavior."

State Oil v. Khan:

"Informed by the foregoing decisions and scholarship, and guided by the general view that the antitrust laws’ primary purpose is to protect interbrand competition . . . and that condemnation of practices resulting in lower consumer prices is disfavored . . . this Court finds it difficult to maintain that vertically-imposed maximum prices could harm consumers or competition to the extent necessary to justify their per se invalidation."

Cargill, Inc. v. Monfort of Colorado, Inc.:

"The proposed merger does not constitute a threat of antitrust injury. A showing, as in this case, of loss or damage due merely to increased competition does not constitute such injury."

Here's the Red Hat Novell Motion, followed by the Wallace proposed Amended Complaint [PDF].

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

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION


DANIEL WALLACE,

Plaintiff,

v.

INTERNATIONAL BUSINESS MACHINES
CORPORATION,
RED HAT, INC.; and
NOVELL, INC.,

Defendant.



Case No. 1:05-cv-678-SEB-VSS



RED HAT, INC. AND NOVELL, INC.'S
MOTION TO DISMISS COMPLAINT

Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, Defendants Red Hat, Inc. and Novell, Inc., by counsel, move to dismiss the Complaint with prejudice for the reason that the Complaint fails to state a claim against Defendants upon which relief can be granted. With and in support of this Motion, Defendants Red Hat, Inc. and Novell, Inc. have filed a separate brief.



Respectfully submitted,

ICE MILLER

s/ Philip A. Whistler
Philip A. Whistler
[e-mail]
Curtis W. McCauley
[e-mail]
ICE MILLER
[address, phone]

Counsel for Defendants Red Hat, Inc., and
Novell, Inc.

1

CERTIFICATE OF SERVICE

The undersigned hereby certifies that on the 6th day of July, 2005, a copy of the foregoing was filed electronically. Notice of this filing will be sent to the following parties by operation of the Court's electronic filing system. Parties may access this filing through the Court's system.

Michael Gottschlich
[e-mail]
Kendall H. Millard
[e-mail]
BARNES & THORNBURG
A copy of the foregoing will be sent via first class mail to the following parties:
Daniel Wallace
[address]



s/ Philip A. Whistler
Philip A. Whistler

2

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

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION


DANIEL WALLACE,

Plaintiff,

v.

INTERNATIONAL BUSINESS MACHINES
CORPORATION,
RED HAT, INC.; and
NOVELL, INC.,

Defendant.



Case No. 1:05-cv-678-SEB-VSS



BRIEF OF RED HAT, INC. AND NOVELL, INC.
IN SUPPORT OF MOTION TO DISMISS COMPLAINT

I.

PRELIMINARY STATEMENT

Defendants Red Hat, Inc. and Novell, Inc. join in the arguments presented by International Business Machines Corporation ("IBM") in support of its Motion to Dismiss the Complaint. Red Hat, Inc. and Novell, Inc. submit the following additional brief statement of reasons the Complaint should be dismissed with prejudice.

II.

ARGUMENT

A. The Complaint Fails to Allege a Violation of the Sherman Act.

The single substantive paragraph of the Complaint alleges that the Defendants have "conspired to promote a copyright licensing scheme employing the GNU General Public License to fix the prices of computer programs." Plaintiff goes on to allege that this "denies the Plaintiff

1

an opportunity to earn future revenues in the field of computer programming." (Emphasis added.) The relief requested is an injunction prohibiting the "promotion or use of Section 2(b) of the General Public License."

The General Public License ("GPL") which is the subject of the Complaint is part of the legal framework for what is commonly referred to as "free" or "open source" software. Licensees of computer programs that are licensed pursuant to the GPL are not charged for the license, but are required to license any derivative works that they create using the licensed software under the same terms and conditions, which include (a) making the source code freely available, and (b) not charging for the license. (See Exhibit A, attached.)

Section 2(b) of the GPL provides:

You must cause any work that you distribute or publish, that in whole or in part contains or is derived from the Program or any part thereof, to be licensed as a whole at no charge to all third parties under the terms of this License.

Thus, under Section 2(b) of the GPL, any licensee of "open source" or "free" software (a) is not charged for the license, (b) receives the source code and is free to improve the program and make derivative works from it, but (c) must in turn license any improvements or derivative works, at no charge, to all third parties under the same terms.

Construing Plaintiff's allegations in light of the actual terms of the GPL, and construing them most favorably to the Plaintiff, it is evident that Plaintiff has failed to allege a violation of the Sherman Act. The "agreement" that is alleged – Section 2(b) of the GPL – is, if anything, a vertical maximum price restraint, which after State Oil v. Khan, 522 U.S. 3 (1997), is to be evaluated under the Rule of Reason. Indeed, even before State Oil v. Khan, courts recognized that the unique attributes of intellectual property licenses made per se treatment of vertical price restraints in software licenses inappropriate. See LucasArts Entertainment Company v. Humongous Entertainment Company, 870 F. Supp. 285 (N.D. Cal. 1993) (granting summary

2

judgment against licensee who claimed that software license provision regulating resale prices for derivative works violated the Sherman Act).

Because Plaintiff has not alleged any per se violation, the alleged restraint must be judged under the Rule of Reason. Spanish Broadcasting System of Florida, Inc. v. Clear Channel Communications, Inc., 376 F.3d 1065, 1071 (11th Cir. 2004). In cases subject to the Rule of Reason, anticompetitive effects in a relevant market must be specifically alleged. Here, Plaintiff conspicuously fails to allege any effect on anyone other than himself. This failure to allege an effect on competition requires dismissal of the Complaint.

In Car Carriers, Inc. v. Ford Motor Company, 745 F.2d 1101 (7th Cir. 1984), the Seventh Circuit upheld the dismissal of a complaint under Rule 12(b)(6) on the basis that the plaintiff had not alleged an anticompetitive effect:

The fatal flaw in these pleadings is the absence of any allegation, either direct or inferential, of an anticompetitive effect. . . . As the Supreme Court has aptly stated, the antitrust laws were designed to protect competition, not merely competitors.
Id. at 1109.

In short, Plaintiff has failed to allege a per se violation of the Sherman Act, nor has he alleged facts showing injury to competition in a relevant market to state a claim under the Rule of Reason. The Complaint should therefore be dismissed.

B. Plaintiff Has Failed to Allege Antitrust Injury or Plaintiff's Standing to Sue.

The allegations of the Complaint also show that Plaintiff lacks standing to sue because he has suffered no "antitrust injury." This is a separate, and sufficient, basis on which to dismiss the Complaint.

The Supreme Court first articulated in the case of Brunswick Corp. v. Pueblo Bowl-o-Mat, Inc., 429 U.S. 477 (1977), the requirement that a plaintiff suing under the Clayton Act establish "antitrust injury." In Brunswick, the plaintiffs were independent bowling alley

3

operators who alleged that they had been injured by the defendant's unlawful acquisition of failing bowling centers in their neighborhoods. Plaintiffs alleged that if the centers had been allowed to fail, or had been acquired by a less well-financed competitor, the plaintiffs would have been subject to less competition, and would therefore have made greater profits. The Supreme Court, in reversing a judgment in favor of the plaintiffs, explained that a plaintiff who alleges injury by reason of a violation of the Sherman Act must allege more than mere "but for" causation. Such a plaintiff must allege injury that flows directly from the anticompetitive aspect of the challenged activity. The Court reiterated that because the antitrust laws were created for the protection of competition, not individual competitors, a plaintiff does not state a claim under the Sherman Act when he merely complains that increased marketplace competition has diminished his revenues.

The Supreme Court has reaffirmed and extended the holding of Brunswick in subsequent cases that are dispositive here.

First, in Atlantic Richfield Companies v. USA Petroleum Company, 495 U.S. 328 (1990), the Court held that a competitor who alleged that he lost profits due to his competitor's vertical maximum price fixing scheme lacked standing to sue under the antitrust laws. A review of the terms of the GPL, specifically Section 2(b), discloses that this is precisely the situation alleged by this Complaint. Atlantic Richfield establishes that Plaintiff has no standing to bring this Complaint, even if the alleged vertical maximum price fixing agreement were per se unlawful, which after State Oil v. Khan it plainly is not.

The fact that Plaintiff seeks only injunctive relief, rather than damages, does not save the Complaint from dismissal. In Cargill, Inc. v. Monfort of Colorado, 479 U.S. 104 (1986), the court held that antitrust injury requirement applies equally to plaintiffs seeking injunctive relief under Section 16 of the Clayton Act.

4

In short, under State Oil v. Khan, Plaintiff has not alleged a substantive violation of the Sherman Act. Moreover, under the Brunswick, Richfield, and Cargill cases, Plaintiff has not alleged any actual or threatened "antitrust injury" of the sort that would give him standing to sue.

Therefore, even if Plaintiff had stated the elements of an antitrust violation – which he has not – the Complaint should still be dismissed.

III.

CONCLUSION

For all the foregoing reasons, as well as all the reasons cited in the brief filed by IBM, the Complaint should be dismissed with prejudice.



Respectfully submitted,

ICE MILLER

s/ Philip A. Whistler
Philip A. Whistler
[e-mail]
Curtis W. McCauley
[e-mail]
ICE MILLER
[address, phone]

Counsel for Defendants Red Hat, Inc., and
Novell, Inc.

5

CERTIFICATE OF SERVICE

The undersigned hereby certifies that on the 6th day of July, 2005, a copy of the foregoing was filed electronically. Notice of this filing will be sent to the following parties by operation of the Court's electronic filing system. Parties may access this filing through the Court's system.

Michael Gottschlich
[e-mail]
Kendall H. Millard
[e-mail]
BARNES & THORNBURG
A copy of the foregoing will be sent via first class mail to the following parties:
Daniel Wallace
[address]



s/ Philip A. Whistler
Philip A. Whistler

6

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

UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF INDIANA

INDIANAPOLIS DIVISION

Daniel Wallace,

Plaintiff,

v.

INTERNATIONAL BUSINESS MACHINES CORPORATION;
RED HAT INC.;
NOVELL, INC.,

Defendants.

Civil Complaint No. 1:05-cv-0678-SEB-VSS

Amended Complaint

JURISDICTION

This Court has federal jurisdiction pursuant to 28 U.S.C. sec. 1337(a).

STANDING

Plaintiff Daniel Wallace has standing for commencement of this action pursuant to 15 U.S.C. sec. 26.

PARTIES

Plaintiff Daniel Wallace is a citizen and resident of Hancock County in the State of Indiana.

Defendant INTERNATIONAL BUSINESS MACHINES CORPORATION is a New York corporation with business headquarters in the State of New York.

Defendant RED HAT INC. is a Delaware corporation with business headquarters in the State of Utah.

VENUE

Venue for this action is established pursuant to 15 U.S.C. Section 15(a) and supplemented by 28 U.S.C. Section 1391 (a)(2).

COMPLAINT

The Defendants INTERNATIONAL BUSINESS MACHINES CORPORATION, RED HAT INC. and NOVELL INC. have conspired with the FREE SOFTWARE FOUNDATION INC. and others to fix the price of intellectual property in computer programs that are collectively known as the Linux (or GNU/Linux) operating system.

The Defendants have conspired by using a price-fixing agreement known as the GNU GENERAL PUBLIC LICENSE to develop, distribute and leverage the Linux operating system to provide computing services for consumers.

The Defendants' per se horizontal price-fixing scheme is rapidly foreclosing competition in the market for computer operating systems. Said price-fixing scheme threatens to prevent Plaintiff Daniel Wallace from entering into the free market with his own computer operating system.

REQUEST FOR RELIEF

The Plaintiff respectfully requests the Court grant equitable relief in the form of an injunction prohibiting the development and distribution of the Linux operating systtem under GNU GENERAL PUBLIC LICENSE in the course of commerce by the defendants INTERNATIONAL BUSINESS MACHINES CORPORATION, RED HAT INC. and NOVELL INC.

Dated this 5th day of July, 2005.

__[signature]___
Daniel Wallace, pro se
[address]


  


Red Hat and Novell Also File Motion to Dismiss Wallace | 177 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections go here.
Authored by: Darkside on Wednesday, July 06 2005 @ 10:02 PM EDT
.

[ Reply to This | # ]

Off topic goes here
Authored by: Darkside on Wednesday, July 06 2005 @ 10:04 PM EDT
URLs should be made clickable, like this:

<a href="http://www.example.com/">link text</a>

[ Reply to This | # ]

Red Hat and Novell Also File Motion to Dismiss Wallace
Authored by: John Hasler on Wednesday, July 06 2005 @ 10:21 PM EDT
Plaintiff apparently alleges that he cannot compete because he is not able to earn income by licensing to others any modifications he made to a program he obtained for free under the License, given that all such modifications must also be licensed at no charge.
But he can. He merely has to distribute them as works in themselves rather than as components of derivatives of works he obtained under the license.

[ Reply to This | # ]

"Having products that are engineered to work together"...
Authored by: Anonymous on Wednesday, July 06 2005 @ 10:26 PM EDT
Oh, that's rich. I think they mean "Having products that are engineered to
keep others' from working with us".

My browser (Firefox) works just fine with the [mostly] Apache-hosted websites of
the Internet.

My office suite (OpenOffice.org) works fine together with all its component
parts (Writer, Calc, Impress) AND can r/w MS. word docs to boot, AND can output
PDFs.

My email client (Thunderbird) works just fine with *gasp* reading emails from
the plethora of Outlook clients (gag).

I could go on, but mercifully won't :)


[ Reply to This | # ]

Wallace's amendments, it's like he read but didn't understand
Authored by: Anonymous on Wednesday, July 06 2005 @ 10:28 PM EDT
Wallace appears to have filed motions to amend in both Wallace v FSF, and Wallace v IBM/RedHat/Novell

In both motions he refers to an attached exhibit being his proposed amended complaint.

In Wallace v IBM/RedHat/Novell, there is an exhibit attached, I will come to it in a minute

In Wallace v FSF, I haven't seen the exhibit. I do not know if it was not attached or did not turn up yet. I imagine that if the proposed amended complaint exists, it must be similarly amended to what he tries to do in IBM/RedHat/Novell.

I think he has still failed to do it right in IBM/RedHat/Novell, which I have seen

1. Standing

(a) He doesn't allege any injury

(b) He doesn't allege anything about the market, market power, etc.

(c) He doesn't allege that he is a competitor in the market. He merely says that he plans to enter the market. In a previous story, I have linked to a case about "intention and preparedness" which is the standard (as I understand it), and of course IBM mentioned it in their dismissal motion, and Wallace fails to allege 3 of the 4 necessary bases (listed below) to pass this test.

From http://www.jurisearch.com/newroot/caselink.asp?series=F.2d&citationno=716+F. 2d+646

Some courts have held that potential new entrants into a market may not recover under section 4 because the amount of damage sustained is not sufficiently ascertainable, and thus a plaintiff has not suffered tangible injury to his business or property. See, e.g., Duff v. Kansas City Star Co., 299 F.2d 320, 322-23 (8th Cir.1962). However, we have adopted the view that a party "who has taken substantial

Page 660

demonstrable steps to enter an industry and who is thwarted in that purpose by antitrust violations, has suffered a possible ascertainable loss." Solinger v. A & M Records, Inc., 586 F.2d at 1309. In making the determination whether a plaintiff is a prospective entrant who has taken substantial demonstrable steps, we suggested the "intention and preparedness" test, which focuses on the following four factors:

1. The background and experience of plaintiff in his prospective business ....

2. Affirmative action on the part of plaintiff to engage in the proposed business ....

3. The ability of plaintiff to finance the business and the purchase of equipment and facilities necessary to engage in the business ....

4. The consummation of contracts by plaintiff ...


2. Per-Se vs Rule Of Reason.

In his complaint he added a phrase simply stating he is an alleging a per-se violation.

I do not think this helps him for at least two reasons:

(a) The reason PJ cites in the article (from Novell and Red Hat's memo)

(b) In IBM's memo they point to State Oil vs Khan & Khan. A US supreme court decision from 1997 stating the vertical minimum price limits need to be judged under the rule of reason (which incidentally overturns previous Supreme court rulings).

So the mere fact that Wallace adds "per-se", a legal conclusion, about the standard is not going to help him. The legal standard is whatever it is, and it seems to be "rule of reason" according to the US Supreme Court.

3. While he accuses IBM/RedHat/Novell of violations, and conspiracies, he doesn't allege a single fact in support of this contention (unless you count his jumping to a legal conclusion that the GPL is a "per-se" violation of antitrust law). The precedents cited in the IBM memo, seem more than sufficient to dismiss a complaint which merely dresses up legal conclusions in antitrust language.


In short, I think his amendment (at least in the IBM/RedHat/Novell case) does him no real good, his amendment partially only one* of 5 reasons for dismissal already cited.

* He cures 1/4 of the defect in that one, but as he appears to need to hit all 4 bases on that one, it's not really cured at.

... So I think there are still at least 5 reasons for dismissal that have already been cited.

Quatermass
IANAL IMHO etc

[ Reply to This | # ]

Microsoft's Steve Ballmer tesifies on behalf of GPL
Authored by: Anonymous on Wednesday, July 06 2005 @ 10:38 PM EDT
Wouldn't it be sweet if Novell or Red Hat called Steve to court to testify on
behalf of the GPL.

[ Reply to This | # ]

Red Hat and Novell Also File Motion to Dismiss Wallace
Authored by: AntiFUD on Wednesday, July 06 2005 @ 10:41 PM EDT

Well, Ice Miller's memorandum sure was brief, and to the point. And a pleasure
to read.

Good things seem to be happening all over the World today - long may it
continue. May you all be blessed with something that you desire for yourselves
or for others.

Now I must get back to trying to get a new passport for my son, who had his
stolen whilst hiking round China (somewhere 600 miles from Shanghai). He called
me clear as day at 3:00 am last night - magical things telephones - and I just
emailed copies of his visa and passport to his aol account. Now if only the
Consulate in Shanghai would answer their phone with a person rather than a
recording, I would be on Easy Street (ain't that in New Orleans, or it
Bourbon?).

Have a great day, y'all.


---
IANAL - But IAAAMotFSF(not related to Daniel Wallace) - Free to Fight FUD

[ Reply to This | # ]

    Vertical v. Horizontal Price Restraints
    Authored by: Ruidh on Wednesday, July 06 2005 @ 10:48 PM EDT
    Wallace alledges horizontal price restraints while both the IBM and Red
    Hat/Novell motions discuss vertical price restraints. There's a useful SCOTUS
    case which held that vertical price restraints are not per se illegal, as are
    horizontal restraints,

    What I haven't seen any discussion of is which characterization is correct.


    ---
    All my comments on this site are licensed under a Creative Commons License.
    http://creativecommons.org/licenses/by-nc/2.0/

    [ Reply to This | # ]

    Filing "pro persona"...
    Authored by: greyhat on Wednesday, July 06 2005 @ 11:18 PM EDT
    means filing on behalf of his other personalities? I admit my Latin's a little
    weak...

    ---
    Give me the knowledge to change the code I do not accept, the wisdom not to
    accept the code I cannot change, and the freedom to choose my preference.

    [ Reply to This | # ]

    The real crime here...
    Authored by: Anonymous on Thursday, July 07 2005 @ 12:01 AM EDT
    is that Wallace will go down in history for this farce as the guy who challenged
    the GPL and the world in the US courts. What a sorry example for future law
    students to have to learn about!

    [ Reply to This | # ]

    Wallace and Gromit Cartoon!
    Authored by: kawabago on Thursday, July 07 2005 @ 12:01 AM EDT
    Who knows, maybe they're related!

    http://www.wallaceandgromit.com/home2.asp

    Cute cartoons, a silly break from the silliness.

    ---
    TTFN

    [ Reply to This | # ]

    I would have commented earlier but....
    Authored by: Anonymous on Thursday, July 07 2005 @ 12:09 AM EDT
    I was planning to comment on:

    "Having products that are engineered to work together--something
    open-source competitors cannot do--will ultimately make Microsoft products
    easier to run and more cost-effective over time, said Paul Flessner, senior vice
    president of server applications."

    But when I tried IE suddenly reported some nonsense on s "blue screen"
    and Win 98 locked up tight. On reboot Explorer did some more "illegal
    operation" but after a couple more tires I got back on line. I had a 72
    Olds that would do this too.

    Just one question on the subject of "....will ultimately make Microsoft
    products easier to run .." just when can we expect this???

    I've been waiting ever since I junked that old Olds....

    [ Reply to This | # ]

    GPL: Vertical vs. horizontal agreement
    Authored by: Khym Chanur on Thursday, July 07 2005 @ 12:21 AM EDT
    I'm not sure, but I think that Wallace might be trying to say that the copyright holder who uses the GPL on their software gives up so many rights to their software that they only have equal footing with any of their distributors, and are thus in a horizontal relatioship because of that lack of power over their distributors.

    ---
    Give a man a match, and he'll be warm for a minute, but set him on fire, and he'll be warm for the rest of his life. (Paraphrased from Terry Pratchett)

    [ Reply to This | # ]

    Thank you for the free lesson PJ
    Authored by: Anonymous on Thursday, July 07 2005 @ 12:37 AM EDT
    signed Daniel W.

    (just kidding, signed Anonymous)

    [ Reply to This | # ]

    Interoperability, in the real world
    Authored by: qu1j0t3 on Thursday, July 07 2005 @ 01:00 AM EDT
    Kerneltrap provides this excellent example of how proprietary companies fail to respond to serious interoperability issues, and in fact militate against their solutions in every way possible. The major culprit in this example is Cisco Systems, and the way that they responded to information about a protocol vulnerability is remarkable, and frightening. It illustrates that open projects are infinitely more responsive and don't retaliate with ad hominem and legal attacks when provided with useful information.

    (Don't confuse this with a "product" vulnerability, such as those revealed with particular frequency in M$ products, since these are recent researched risks of a published standard (ICMP) and affects all vendors equally. So it's also a great case study for comparing the responsiveness and attitude of vendors, on a fundamental issue of interoperability (low level networking).)

    So not only does closed and proprietary software development have a less effective quality and security process, but it attempts to hamstring independent security efforts as well. Not very encouraging, but at least this kind of reporting may shock enough people into realising what a disaster the patent system, and corporate misbehaviour, is creating for all of us.

    Around this same time, Fernando began receiving emails from Cisco who had numerous technical questions about his solutions to the problems. He continued to reply thoroughly to all their questions, until two months later when he received an email from Cisco's lawyer claiming that Cisco held a patent on his work. He asked their lawyer for specifics, but they refused to reveal any details. For two more months this continued, until Fernando was cc'd on an email thread between Cisco, Linus Torvalds, and David Miller. Reading back through the thread, Fernando found where David Miller had asked Cisco how they could possibly patent sequence tracking as Linux had been doing it for many years, and later in the same thread Cisco noted that they had withdrawn their patent. ...

    While the patent issue was happening with Cisco, CERT/CC created a mailing list to allow vendors to communicate amongst themselves about the newly discovered vulnerability. "They blamed me for submitting my work," Fernando said in exasperation. "One of Cisco's managers of PSIRT said I was cooperating with terrorists, because a terrorist could have gotten the information in the paper I wrote!" Fernando was familiar with intellectual property arguments with last year's Slipping In The Window paper, so he had intentionally publicly published his findings to prevent it from being patented. "Then they accused me of working with terrorists, and even still tried to patent my work!" He noted that he now suspected had he actually worked exclusively with Cisco as they had requested, they probably would have managed to patent all of his ideas. ...

    Fernando also found Microsoft difficult to work with. "Microsoft's acknowledgment policy says that you must report the issues to them 'confidentially'", he explained. As he chose to contact CERT and various open source projects as well, he claimed that they refused to give him credit for the discovery. Only with much effort did he finally get them to acknowledge that he had discovered the issue. ...

    [ Reply to This | # ]

    Wiindows XP Starter Edition AKA 3rd world windows
    Authored by: hank scorpio on Thursday, July 07 2005 @ 01:40 AM EDT
    Speaking of consumers, I learned something about Microsoft's new low-end XP for the third world. You can only open three windows at a time. Can you imagine?
    While I would hardly want to be labelled as a Microsoft apologist, I will happily wear the pedant moniker. XP starter edition can only run three user applications simultaneously. That is not the same as having three windows open simultaneously.

    [ Reply to This | # ]

    Mr Wallace prevails
    Authored by: Vaino Vaher on Thursday, July 07 2005 @ 02:10 AM EDT
    Now, for arguments sake: Assume Mr Wallace prevails and the court bans development and distribution of GNU/Linux. IBM is a major contributor of code, RedHat and Novell are well-established distro's.

    Any action that the court can order is only applicable in the USA. So SuSe (German company) is set free and RedHat moves its operations to Asia. IBM, meanwhile, stops contributing code and starts contributing funding for software development (much like Google's "Summer Of Code" initiatieve).

    The Linux users of the world will not notice any difference at all. IBM will still have it's superior, cross-platform operating system. SuSe and RedHat will still sell Linux. That is; everyone will go on just like before, except for in the USA. There users will have to rely on free distros like Debian, or RedHat clones like CentOS.

    The only thing Mr Wallace can hope to accomplish is to prove that the US legal system is broken.

    [ Reply to This | # ]

    Thank you GrokLaw ...
    Authored by: Totosplatz on Thursday, July 07 2005 @ 03:15 AM EDT

    Thanks to GrokLaw for keeping nonsense exposed as nonsense, that is a relief - but what an extraordinary relief it would be if there were more of Groklaw in the nature of how everyone came to know about what was ACTUALLY going on in the world!

    Grokalw is an exemplar of how to do the job properly!

    ---
    All the best to one and all.

    [ Reply to This | # ]

    Ballmerese
    Authored by: Anonymous on Thursday, July 07 2005 @ 04:37 AM EDT

    Ballmerese: Having products that are engineered to work together--something open-source competitors cannot do--

    Like PJ said in an earlier article, this is the kind of lie that subtly is exactly opposite of the truth. What Ballmer here really means is something like engineered to work only together and not with anything else.

    (oh, and it's very bad style to write authored instead of written)

    [ Reply to This | # ]

    • Ballmerese - Authored by: Anonymous on Thursday, July 07 2005 @ 10:23 AM EDT
    Red Hat and Novell Also File Motion to Dismiss Wallace
    Authored by: Anonymous on Thursday, July 07 2005 @ 08:58 AM EDT
    Actually I would really like to see Novell and Redhat take up the TCO garbage
    that MS has been spewing with the FTC.

    [ Reply to This | # ]

    Like a bad chess game
    Authored by: greyhat on Thursday, July 07 2005 @ 11:49 AM EDT
    I can't help but picture Wallace sitting at a chessboard one move away from
    checkmate. Every time he moves a piece, the lawyer on the other side chuckles
    and shakes his head, and Wallace quickly moves it pack, yelling "That
    doesn't count! That's not my move; I meant to do... uh..."

    The only difference I guess is that he's actually got 4 games going at once,
    like some untalented version of Bobby Fischer. And he's under extra pressure
    because all his friends, family, strangers off the street, etc. have been
    listening to him brag about this moment all week :)

    ---
    Give me the knowledge to change the code I do not accept, the wisdom not to
    accept the code I cannot change, and the freedom to choose my preference.

    [ Reply to This | # ]

    Red Hat and Novell Also File Motion to Dismiss Wallace
    Authored by: phattaxman on Thursday, July 07 2005 @ 12:03 PM EDT
    With respect to "pro persona", it could be short for "In Propria Persona" which,
    loosely translated, means "In one's own person." In California, at least, it is
    the common term for one who represents him- or herself in court.

    [ Reply to This | # ]

    Groklaw © Copyright 2003-2013 Pamela Jones.
    All trademarks and copyrights on this page are owned by their respective owners.
    Comments are owned by the individual posters.

    PJ's articles are licensed under a Creative Commons License. ( Details )