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IBM and SCO File Reports on What They Think Remains in That Case
Friday, August 31 2007 @ 07:16 PM EDT

Here you go, hot off the PACER presses:
1078 - Filed & Entered: 08/31/2007
Response (NOT to motion)
Docket Text: RESPONSE re [1077] Order, filed by Defendant International Business Machines Corporation, Counter Claimant International Business Machines Corporation. (Sorenson, Amy)

1079 - Filed & Entered: 08/31/2007
Status Report
Docket Text: STATUS REPORT IN COMPLIANCE WITH THE COURTS NOTICE OF DECISION AND REQUEST FOR STATUS UPDATE DATED AUGUST 10, 2007 by SCO Group. (Normand, Edward)

Judge Dale Kimball asked the parties to tell him what they each think remains of SCO v. IBM, and particularly how his August 10 decision in SCO v. Novell impacts on the summary judgment motions [IBM's 597 exhibits in support] in the IBM case. He hasn't ruled on those yet, so this is a pruning operation. But he gets the final say. This is what *they* think is left; but he's the only one that knows ultimately.

IBM sums it up like this:

As is discussed below: (1) the Novell Decision effectively forecloses all of SCO's claims; (2) requires summary judgment in favor of IBM on several of its counterclaims and strengthens IBM's remaining counterclaims; and (3) impacts all of the pending motions.
Well. There you are.

SCO does an interesting dance:

Rather than presenting any argument regarding the effect of the Court's Summary Judgment Order in Novell (the "Order"), SCO submits that the Order bears on SCO's claims and IBM's counterclaims, and on the parties' pending motions, in the following respects. If the Court is inclined to hear argument on any of these issues, SCO will present that argument at the Court's invitation and at the appropriate time.

Like... never, maybe. Hey, the SCO lawyers are not being paid, you know. I'm just guessing, but it does sound like they know better than to waste time on a losing argument, and they know now that this judge has their number, Stuart Singer's impressive legal magic at hearings notwithstanding. Indeed they acknowledge that the judge may feel he can dismiss the following claims:

SCO believes that the Order would constitute a basis upon which the Court could dismiss SCO's First, Second, Third, Fourth, Fifth or Eighth Causes of Action in its Second Amended Complaint. SCO is not voluntarily dismissing these claims, but acknowledges that the Court's rulings with respect to Novell's right to waive contract claims if applied to the IBM case would resolve these claims. Because these are separate cases, SCO submits it is appropriate that the resolution of these claims be reflected in a separate Order, and Judgment. This statement is without prejudice to SCO's right to pursue motions for reconsideration and appellate rights in both the IBM and Novell actions.

Any hope is at the appellate level, and I doubt they in all sincerity expect a lot there either in either Novell or IBM now. I love the reservation of the right to bring a motion for reconsideration. I'm doubtful that will work out well for them. But you never know. Hope springs eternal and all that. And in any case, they seem to realize that an appeal is the only hope, so what difference do the odds make when it's your only choice? They lay out the plan in IBM, though, on what they think remains. It's all about post-1995 copyrights they might own and that they imagine they can tie to misuse:

SCO submits that the Order does not preclude SCO from pursuing copyright infringement claims insofar as it occupies the position of an exclusive licensee from Novell, or as the owner of the post-1995 UnixWare copyrights.

Right. When the copyright owner is right there saying not to. After researching that very point on what SCO might claim in UnixWare post 1995, all I can say is, good luck with that, boys.

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

SNELL & WILMER L.L.P.
Alan L. Sullivan (3152)
Todd M. Shaughnessy (6651)
Amy F. Sorenson (8947)
[address]
[phone]
[fax]

CRAVATH, SWAINE & MOORE LLP
Evan R. Chesler (admitted pro hac vice)
David R. Marriott (7572)
[address]
[phone]
[fax]

Attorneys for Defendant/Counterclaim-Plaintiff
International Business Machines Corporation

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH

THE SCO GROUP, INC.,

Plaintiff/Counterclaim-Defendant,

v.

INTERNATIONAL BUSINESS
MACHINES CORPORATION,

Defendant/Counterclaim-Plaintiff.
IBM'S MEMORANDUM IN RESPONSE TO
THE COURT'S ORDER OF AUGUST 10, 2007


Civil No. 2:03CV-0294 DAK

Honorable Dale A. Kimball

Magistrate Judge Brooke C. Wells

Defendant/Counterclaim-Plaintiff International Business Machines Corporation ("IBM") respectfully submits this memorandum in response to the Court's Order of August 10, 2007, requesting that IBM and The SCO Group, Inc. ("SCO") submit a statement of their views as to the status of this case and, more specifically, the effect of this Court's decision in SCO v. Novell, dated August 10, 2007 (the "Novell Decision"), on each of the pending motions.

Preliminary Statement

As the Court stated in its Order of August 10, 2007, the Novell Decision "significantly impacts the claims and counterclaims asserted in the instant case". As is discussed below: (1) the Novell Decision effectively forecloses all of SCO's claims; (2) requires summary judgment in favor of IBM on several of its counterclaims and strengthens IBM's remaining counterclaims; and (3) impacts all of the pending motions.

Status Report

A. SCO's Claims Against IBM

SCO has asserted nine claims against IBM: (1) four breach of contract claims (Counts I to IV); (2) one copyright infringement claim (Count V); (3) one unfair competition claim (Count VI); and (4) three tortious interference claims (Counts VII to IX). The Novell Decision disposes of these claims.

1. Contract Claims

The contract claims asserted by SCO allege: (1) breach of the IBM Software Agreement (Count I); (2) breach of the IBM Sublicensing Agreement (Count II); (3) breach of the Sequent Software Agreement (Count III); and (4) breach of the Sequent Sublicensing Agreement (Count IV). According to SCO, the allegedly breached agreements precluded IBM from contributing its

1

own code to Linux. The Novell Decision forecloses these claims because it affirms Novell's right under its Asset Purchase Agreement with The Santa Cruz Operation, Inc. (the "APA") to waive the alleged breaches on behalf of SCO.

While the Court can decide the parties' summary judgment motions and dispose of SCO's contract claims based on the Novell Decision alone, deciding issues not addressed by the Novell Decision would further develop the record, result in alternative grounds for the Court's ruling and streamline the resolution of IBM's remaining claims. For example, a ruling in IBM's favor on its estoppel argument would not only further support the dismissal of SCO's contract claims, but it would also narrow the issues relating to IBM's counterclaims for breach of contract and unfair and deceptive trade practices, among others.

2. Copyright Claim

SCO has also asserted a claim against IBM for copyright infringement (Count V). According to SCO, IBM infringed certain UNIX and UnixWare copyrights by continuing to distribute AIX and Dynix after SCO purports to have terminated IBM's right to do so. The Novell Decision forecloses this claim as it depends on SCO's establishing a predicate breach of contract which, for the reasons discussed above, SCO cannot establish. Moreover, the only allegedly infringed copyrights are, under the Novell Decision, owned by Novell, not SCO.

The Court can decide IBM's summary judgment motion and dispose of SCO's copyright claim based on the Novell Decision alone. However, resolving issues not addressed by the Novell Decision would further develop the record, result in alternative grounds for the Court's ruling and streamline the resolution of IBM's remaining claims. For example, in addition to representing further bases for disposing of SCO's copyright claim, rulings that IBM has a

2

perpetual and irrevocable license to the allegedly infringed code and that SCO misused its alleged copyrights would resolve issues pertinent to IBM counterclaims, such as IBM's claim that SCO disparaged IBM's AIX and Dynix products as "unauthorized" and "unlawful" based on the supposed termination by SCO of IBM's license.

3. Tortious Interference Claims

In addition, SCO has asserted three claims against IBM for tortious interference (Counts VII to IX). Count VIII accuses IBM of inducing Novell to assert copyright and waiver rights that SCO argues Novell does not have under the APA. The Novell Decision forecloses this claim because it makes clear that Novell has the rights IBM is alleged to have induced Novell to exercise: Novell owns the copyrights, and it has the right to waive SCO's claims. Moreover, the Court's ruling precludes any claim by SCO that it would have been an act of bad faith for IBM to induce Novell to assert ownership of the copyrights or to waive SCO's claims.

Insofar as SCO's Counts VII and IX depend on the proposition that IBM acted improperly in contributing its own code to Linux, they are likewise precluded. Count VII alleges IBM interfered with SCO's business relationship with 175 companies (besides Novell) by urging them to use Linux (instead of SCO's Unix products) while knowing that Linux included stolen UNIX code. Count IX alleges that IBM interfered with SCO's business relationships with six other entities by urging them not to do business with SCO because of SCO's efforts to protect the allegedly stolen code in Linux. As stated, the Novell Decision precludes SCO from challenging IBM's contributions of its own code to Linux because Novell waived such claims and because Novell, not SCO, owns the copyrights in the allegedly infringed UNIX and UnixWare code. As a result, the decision undermines the central premise of these claims.

3

We believe the Court can decide IBM's summary judgment motion and dispose of SCO's tortious inference claims based on the Novell Decision alone. But here again, deciding issues not addressed by the Novell Decision would further develop the record and, we submit, result in alternative grounds for the Court's ruling, such as the lack of evidence of interference by IBM.

4. SCO's Unfair Competition Claim

Finally, SCO has asserted a claim against IBM for unfair competition (Count VI). The crux of this claim is that IBM exceeded the scope of its license to certain SVr4 code (licensed to IBM by The Santa Cruz Operation during Project Monterey) by copying the code into IBM's AIX for POWER product. SCO failed to provide the detailed disclosures required by the Court with respect to any allegedly misused code not subject to copyrights owned by Novell. 1SCO cannot pursue a claim for unfair competition with respect to code in which another party owns the copyrights and has the panoply of rights associated with copyright ownership. To the extent SCO's unfair competition claim challenges the conduct underlying SCO's contract, copyright and tortious interference claims, it is foreclosed by the Novell Decision for the same reasons that SCO's other causes of action are foreclosed (discussed above).

Although the Court can decide IBM's summary judgment motion and dispose of SCO's unfair competition claim based on the Novell Decision alone, resolving issues not addressed by the Novell Decision would further develop the record and, we submit, result in alternative

4

grounds for the Court's ruling, such as that SCO's claim is time barred, that it is preempted by the copyright law and that SCO cannot show damages. 2

B. IBM's Counterclaims

IBM has asserted eleven counterclaims against SCO: (1) two claims for declaration of non-infringement of copyright (Counterclaims IX and X); (2) one claim for breach of contract (Counterclaim I); (3) three claims relating to SCO's copying of IBM code in Linux (Counterclaims VI to VIII); (4) four claims concerning SCO's campaign to create fear uncertainty and doubt about IBM's products and services (Counterclaims II to V); and (5) one claim for a declaration of IBM's rights under all of its other claims (Counterclaim XIV).

1. Claims for Declaration of Non-Infringement

IBM has asserted two claims against SCO for declaration of non-infringement of copyright ! one relating to IBM's continued distribution of AIX and Dynix (Counterclaim IX), and the other relating to IBM's Linux activities (Counterclaim X). Ownership of the allegedly infringed copyrights is an essential element of any claim by SCO against IBM for copyright infringement. The only allegedly infringed copyrights specifically identified by SCO in its Final Disclosures and in opposition to IBM's motion for summary judgment are, under the Novell Decision, owned by Novell, not SCO. Thus, the Novell Decision requires the entry of judgment in favor of IBM on both Counterclaims IX and X. 3

5

IBM did not move for summary judgment on its Counterclaim IX, and the Court can resolve Counterclaim X in IBM's favor without deciding issues not addressed by the Novell Decision. However, addressing the issues not considered in the Novell Decision would not only further develop the record, but also would result in alternative grounds for the Court's ruling and streamline the resolution of IBM's remaining claims. For example, IBM's motion raises issues as to whether IBM has one or more licenses to the allegedly infringed code, whether SCO is estopped from pursuing its claims and whether SCO has misused the copyrights in dispute. These are issues in common with IBM's other counterclaims.

2. Contract Claim

IBM has asserted a claim against SCO for breach of the same contracts that IBM is alleged to have breached, under which IBM has a perpetual and irrevocable license. (Counterclaim I). This claim challenges a variety of misconduct by SCO, most (if not all) of which is affected by the Novell Decision. While IBM did not move for summary judgment on this claim, a finding of liability could be entered in favor of IBM based on the Novell Decision alone. For example, IBM contends that SCO breached the agreements by, among other things, purporting to terminate IBM's license on the basis of IBM's alleged breach of the agreements. Because the Novell Decision forecloses SCO's contract claims (discussed above), it precludes SCO's purported basis for terminating IBM's perpetual and irrevocable license and thus establishes an independent basis for a finding of liability in favor of IBM on its contract claim.

6

3. Claims Relating to SCO's Copying of IBM Code in Linux

IBM has asserted three claims against SCO relating to SCO's copying of IBM code in Linux: (1) copyright infringement (Counterclaim VIII); (2) breach of the General Public License (the "GPL") (Counterclaim VI); and (3) promissory estoppel (Counterclaim VII). IBM claims that SCO literally copied and distributed hundreds of thousands of lines of IBM code, which IBM contributed to Linux under the GPL, after SCO lost permission to do so by repudiating and breaching the GPL. IBM moved for summary judgment only with respect to Counterclaim VIII, and SCO moved for summary judgment with respect to Counterclaims VI, VII, and VIII. The Novell Decision does not by itself resolve these claims. However, the Novell Decision precludes SCO's primary defenses to all three claims: that its actions were justified by IBM's alleged breaches of contract and that IBM cannot assert its copyrights because Linux as a whole is a derivative work of UNIX System V. Insofar as it rejects SCO's allegations of breach of contract and holds that SCO does not own the copyrights to UNIX System V, the Novell Decision rejects these defenses and strengthens IBM's claims.

4. Claims Concerning SCO's Campaign To Create Fear Uncertainty and
Doubt About IBM's Products and Services

IBM has asserted four claims against SCO concerning SCO's campaign to create fear, uncertainty and doubt about IBM's products and services: (1) violation of the Lanham Act (Counterclaim II); (2) unfair competition (Counterclaim III); (3) intentional interference with prospective economic relations (Counterclaim IV); and (4) violation of the New York State Unfair and Deceptive Trade Practices Act (Counterclaim V). These claims concern, among other things, SCO's campaign of publicly disparaging IBM, making false and misleading statements to the press and IBM's customers about the quality and origins of IBM's AIX, Dynix,

7

and Linux products and/or services, filing and threatening to file baseless claims based on non- existent contract rights and copyrights, and attempting to license copyrights it did not own for the use of Linux. Only SCO moved for summary judgment as to these claims.

The Novell Decision does not resolve these claims, but it plainly strengthens them, such as by establishing the falsity of SCO's claims regarding AIX and Linux (e.g., that they are unauthorized derivatives of copyrighted works owned by SCO). Moreover, the Novell Decision undermines SCO's summary judgment motion, which asserts that the challenged conduct is not actionable on the grounds that it is privileged and that SCO acted in good faith. For example, the Novell Decision cuts against SCO's claims of good faith inasmuch as it established that SCO lacked the right to undertake the conduct at issue.

C. Other Pending Motions

In addition to the pending summary judgment motions, a number of additional motions have been fully briefed but are still pending decision: (1) SCO's Motion for Reconsideration of the November 29, 2006 Order (Doc. # 894); (2) SCO's Objections to the Magistrate Judge's Order on IBM's Motion to Confine (Doc. # 899); (3) SCO's Motion to Amend Its December 2005 Submission (Doc. # 913); (4) SCO's Motion for Reconsideration by the Magistrate Court of the Order Denying SCO's Motion for Relief for IBM's Spoliation of Evidence (Doc. # 986); and (5) SCO's Objections to the Magistrate Courts Order Denying SCO's Motion for Relief for IBM's Spoliation of Evidence (Doc. # 995).

The Court need not decide these motions insofar as they relate to SCO's breach of contract claims and IBM's Tenth Counterclaim because, as discussed, the Novell Decision

8

forecloses those claims. We urge the Court to do so nevertheless so as to further develop the record.

Conclusion

For the foregoing reasons, the Novell Decision: (1) effectively forecloses all of SCO's claims; (2) requires summary judgment in favor of IBM on several of its counterclaims and strengthens IBM's remaining counterclaims; and (3) impacts all of the pending motions. DATED this 31st day of August, 2007.

SNELL & WILMER L.L.P.

/s/ Amy F. Sorenson
Alan L. Sullivan
Todd M. Shaughnessy
Amy F. Sorenson

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

Attorneys for Defendant/Counterclaim-Plaintiff
International Business Machines Corporation

Of Counsel:

INTERNATIONAL BUSINESS MACHINES CORPORATION
Alec S. Berman
[address, phone]

Attorneys for Defendant/Counterclaim-Plaintiff
International Business Machines Corporation


1 SCO has suggested that this claim survives because the code at issue is subject to post-1995 copyrights owned by it under the Novell Decision. However, SCO could not and has not identified any such copyrights. Moreover, as stated, SCO never made the disclosures required by IBM's discovery requests and the Court's orders with respect to the "Project Monterey" code on which it seeks to base its claim.

2 Unlike SCO's other claims, its unfair competition claim would be tried by the Court (not a jury) (Joint Development Agreement ∂ 22.3 (IBM Summ. J. Ex. 245)) and is subject to a $5 million limitation of liability (id. ∂ 20.1).

3 SCO has suggested that the Novell Decision may not foreclose these claims insofar as (1) the claims seek a declaration relating to post-1995 copyrights and (2) SCO has an exclusive license to any pre-1995 copyrights, permitting it to sue for infringement on those copyrights. Nowhere in its Final Disclosures did SCO identify any post-1995 copyright allegedly infringed by IBM's Linux activities. No basis exists for finding that SCO has an exclusive license to the UNIX and UnixWare copyrights owned by Novell.

9

CERTIFICATE OF SERVICE

I hereby certify that on the 31st day of April, 2007, a true and correct copy of the foregoing, together with the addenda thereto, were electronically filed with the Clerk of the Court and delivered by CM/ECF system to the following:

Brent O. Hatch
Mark F. James
HATCH, JAMES & DODGE, P.C.
[address]

Robert Silver
Edward Normand
BOIES, SCHILLER & FLEXNER LLP
[address]

Stephen N. Zack
Mark J. Heise
BOIES, SCHILLER & FLEXNER LLP
[address]
/s/ Amy F. Sorenson

_______________

10

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

Brent O. Hatch (5715)
Mark James (5295)
HATCH, JAMES & DODGE, PC
[address]
[phone]
[fax]

David Boies (admitted pro hac vice)
Robert Silver (admitted pro hac vice)
Edward Normand (admitted pro hac vice)
BOIES, SCHILLER & FLEXNER LLP
[address]
[phone]
[fax]

Devan V. Padmanabhan (admitted pro hac vice)
DORSEY & WHITNEY LLP
[address]
[phone]
[fax]

Stephen N. Zack (admitted pro hac vice)
BOIES, SCHILLER & FLEXNER LLP
[address]
[phone]
[fax]

Stuart Singer (admitted pro hac vice)
BOIES, SCHILLER & FLEXNER LLP
[address]
[phone]
[fax]

Attorneys for Plaintiff, The SCO Group, Inc.

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH

THE SCO GROUP, INC.

Plaintiff/Counterclaim-Defendant,

v.

INTERNATIONAL BUSINESS
MACHINES CORPORATION,

Defendant/Counterclaim-Plaintiff.
SCO'S STATEMENT IN
COMPLIANCE WITH THE COURT'S
NOTICE OF DECISION AND
REQUEST FOR STATUS UPDATE
DATED AUGUST 10, 2007


Case No. 2:03CV0294DAK

Honorable Dale A. Kimball
Magistrate Judge Brooke C. Wells

Plaintiff/Counterclaim-Defendant, The SCO Group, Inc. ("SCO"), respectfully submits this Memorandum in compliance with the Court's Notice of Decision and Request for Status Update dated August 10, 2007. Rather that presenting any argument regarding the effect of the Court's Summary Judgment Order in Novell (the "Order"), SCO submits that the Order bears on SCO's claims and IBM's counterclaims, and on the parties' pending motions, in the following respects. If the Court is inclined to hear argument on any of these issues, SCO will present that argument at the Court's invitation and at an appropriate time.

I. THE PARTIES' CLAIMS

A. SCO's Claims.

SCO believes that the Order would constitute a basis upon which the Court could dismiss SCO's First, Second, Third, Fourth, Fifth or Eighth Causes of Action in its Second Amended Complaint. SCO is not voluntarily dismissing these claims, but acknowledges that the Court's rulings with respect to Novell's right to waive contract claims if applied to the IBM case would resolve these claims. Because these are separate cases, SCO submits it is appropriate that the resolution of these claims be reflected in a separate Order, and Judgment. This statement is without prejudice to SCO's right to pursue motions for reconsideration and appellate rights in both the IBM and Novell actions.

With respect to its remaining Cause of Action, SCO states as follows:

Sixth Cause of Action Unfair Competition

SCO alleges that IBM has engaged in unfair competition in several respects. The Order does not bear on SCO's allegations (as described in SCO's Second Amended Complaint, interrogatory responses, and/or prior memoranda in the case) that IBM has engaged in unfair competition through its misconduct in connection with Project Monterey and by inducing

2

companies to breach their corporate licensing agreements with SCO. This claim remains ripe both with respect to SCO's ownership of post-1995 UnixWare copyrights and because SCO's ownership of any UNIX or UnixWare copyrights is not necessary for SCO to pursue the claim.

Seventh Cause of Action Interference with Contract

SCO alleges that IBM has induced companies to breach their corporate licensing agreements with SCO. The Order does not bear on this claim.

Ninth Cause of Action Interference with Business Relationships

SCO alleges that IBM interfered with SCO's actual and prospective business relationships with a variety of companies. The Order does not bear on this claim.

SCO's Claim for Copyright Infringement

In its Order dated February 9, 2005, the Court agreed with IBM's arguments on the question and found that SCO had asserted a general Linux copyright claim in this case. As the Court further noted in the same Order, "IBM's Tenth Counterclaim appears to be broader in scope that SCO's claims." The Order as pertaining to ownership of copyrights bears on this claim inasmuch as it would bar SCO from pursuing such claims as the purported owner of all UNIX and UnixWare copyrights. SCO submits that the Order does not preclude SCO from pursuing copyright infringement claims insofar as it occupies the position of an exclusive licensee from Novell, or as the owner of the post-1995 UnixWare copyrights.

B. IBM's Counterclaims.

The Order, in SCO's view, does not resolve any of the Counterclaims. The Tenth Counterclaim, seeking a declaratory judgment of non-infringement of copyrights, is not affected insofar as SCO is able to pursue enforcement as an exclusive licensee or assignee or with respect to post-1995 copyrights that SCO owns.

3

II. EFFECT OF THE ORDER ON THE PARTIES' PENDING MOTIONS

1. SCO's Motion for Partial Summary Judgment on SCO's Third Cause of Action,
For Breach of Contract, dated September 25, 2006, Docket No. 775.

In light of the Novell Order, this motion is moot.

2. SCO's Motion for Summary Judgment on IBM's Second, Third, Fourth, and Fifth
Counterclaims, dated September 25, 2006. Docket No. 776.

This motion remains to be decided to the extent that IBM intends to pursue its Second, Third, Fourth, and/or Fifth Counterclaims.

3. SCO's Motion for Summary Judgment on IBM's Sixth, Seventh and Eighth
Counterclaims, dated September 25, 2006, Docket No. 777.

This motion remains to be decided.

4. IBM's Motion for Summary Judgment on SCO's Contract Claims (SCO's First,
Second, Third and Fourth Causes of Action), dated September 25, 2006, Docket
No. 780.

The Court is able to dismiss these claims on the basis of its determination in the Novell Order that Novell had the right to waive SCO's contract claims, thus rendering a decision on the other grounds asserted in this motion unnecessary.

5. IBM's Motion for Summary Judgment on SCO's Copyright Claim (SCO's Fifth
Cause of Action), dated September 25, 2006, Docket No. 781.

The Court is able to dismiss these claims on the basis of its determination in the Novell Order that Novell had the right to waive SCO's contract claims, thus rendering a decision on the other grounds asserted in this motion

6. IBM's Motion for Summary Judgment on SCO's Unfair Competition Claim
(SCO's Sixth Cause of Action), dated September 25, 2006, Docket No. 782.

This motion remains to be decided as the Order does not bear on SCO's Sixth Cause of Action

4

7. IBM's Motion for Summary Judgment on SCO's Interference Claims (SCO's
Seventh, Eighth and Ninth Causes of Action), dated September 25, 2006, Docket
No. 783.

This motion remains to be decided with respect to SCO's Seventh, Eighth and Ninth Causes of Action for tortious interference.

8. IBM's Motion for Summary Judgment on Its Claim for Copyright Infringement
(IBM's Eighth Counterclaim), dated September 25, 2006, Docket No. 784.

This motion remains to be decided as the Order does not bear on it.

9. IBM's Motion for Summary Judgment on Its Claim for Declaratory Judgment of
Non-Infringement (IBM's Tenth Counterclaim), dated September 25, 2006,
Docket No. 785.

This motion remains to be decided to the extent the SCO is entitled to pursue claims for copyright infringement as an exclusive licensee or assignee or as owner of post-1995 copyrights.

10. SCO's Motion for Reconsideration of the Order Overruling Objections to the
Magistrate Court's Granting of IBM's Motion in Part to Limit Claims, dated
December 13, 2006, Docket No. 894.

This motion remains ripe, as the Order does not render it moot.

11. SCO's Objections to the Magistrate Court's Order Denying SCO's Motion for
Relief for IBM's Spoliation of Evidence, dated March 16, 2007, Docket No. 995.

This motion remains ripe, as the Order does not render it moot.

12. SCO's Objections to the Magistrate Court's Order on IBM's Motion to Confine,
dated January 9, 2007, Docket No. 916.

This motion remains ripe, as the Order does not render it moot.

DATED this 31st day of August, 2007.

HATCH, JAMES & DODGE, P.C.
Brent O. Hatch
Mark F. James

BOIES, SCHILLER & FLEXNER LLP
David Boies
Robert Silver
Stuart H. Singer
Stephen N. Zack
Edward Normand

DORSEY & WHITNEY LLP
Devan V. Padmanabhan

Counsel for The SCO Group, Inc.

By: __/s/ Edward J. Normand_____________
Edward J. Normand

6

CERTIFICATE OF SERVICE

Plaintiff/Counterclaim-Defendant, The SCO Group, Inc., hereby certifies that a true and correct copy of the foregoing was served on Defendant/Counterclaim-Plaintiff, International Business Machines Corporation, on this 31th day of August, 2007, via CM/ECF to the following:

David Marriott, Esq. (email)
Cravath, Swaine & Moore LLP
[address]

Todd Shaughnessy, Esq. (email)
[address]

/s/ Edward Normand

7


  


IBM and SCO File Reports on What They Think Remains in That Case | 103 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Off-topic here, please
Authored by: overshoot on Friday, August 31 2007 @ 07:24 PM EDT
For prettier printing, see the red instructions -- and if you have links worth
clicking, that's even better!

[ Reply to This | # ]

Corrections here, please
Authored by: overshoot on Friday, August 31 2007 @ 07:28 PM EDT
Please put the nature of the correction in the "Title:"

Assuming you can find any, hard as that is to imagine.

[ Reply to This | # ]

[NP] News Picks discusion
Authored by: Aladdin Sane on Friday, August 31 2007 @ 07:32 PM EDT
This thread is for comments on the News Picks.

Please place the title of the News Pick you are commenting on in the Comment Title field.

Thanks.

---
Free minds, Free software

[ Reply to This | # ]

As predicted ...
Authored by: sk43 on Friday, August 31 2007 @ 07:33 PM EDT
SCO is going to claim that it is the exclusive licensor of
UNIX and UnixWare and thus has standing to bring a claim
for copyright infringement:

"SCO submits that the Order does not preclude SCO from
pursuing copyright infringement claims insofar as it occupies
the position of an exclusive licensee from Novell, or as the
owner of the post-1995 UnixWare copyrights.

[ Reply to This | # ]

IBM and SCO File Reports on What They Think Remains in That Case
Authored by: PolR on Friday, August 31 2007 @ 07:41 PM EDT
PJ said
IBM sums it up like this:
As is discussed below: (1) the Novell Decision effectively forecloses all of SCO's claims; (2) requires summary judgment in favor of IBM on several of its counterclaims and strengthens IBM's remaining counterclaims; and (3) impacts all of the pending motions.
Well. There you are.
We don't see how SCOG sums it up. It must be because it doesn't matter?

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What? SCO files a short memo?
Authored by: Anonymous on Friday, August 31 2007 @ 07:58 PM EDT
They do state what they see the status as being, but they don't argue in support
of their position. They'll do it later, if they have to.

I don't recall if Kimball told the parties to present argument in support of
their position, or not. I'd like to know if SCO just ignored part of Kimball's
instructions...

But I'm also quite surprised at SCO's quietness.
They-of-the-perpetual-overlength-memo are passing up the opportunity to spew
verbage at the court? What's up with that?

Option 1: Laziness. BSF isn't getting paid. Not by the word, not by the hour.
And they're kind of busy in the Novell case right now. Putting more resources
on a lost case, for free, may not be what they feel like doing.

Option 2: Delay. Yeah, color me surprised. If Kimball is going to side with
IBM on a point of disagreement over what remains, he's going to need to give SCO
a chance to argue their position first. This creates, at a minimum, one
memorandum's worth of delay.

Option 3: Some gambit I missed? Do others see something more sinister here?

Inquiring minds want to know...

MSS2

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Impacts all of the pending motions?
Authored by: Anonymous on Friday, August 31 2007 @ 08:01 PM EDT
Why did they say that? Are there so many pending motions that they couldn't
list them? Why didn't they say something like: "A bunch of pending motions
are mooted. We win the ones that aren't mooted."?

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Flashy Non-Technical Jubulation Here
Authored by: Anonymous on Friday, August 31 2007 @ 08:19 PM EDT
I have this vision of a Nazgul writing IBM's memo with a lightsabre. Slash: a
NewSCO claim fall to the ground, Stab: another claim goes 'poof'. Someone
clearly was having fun here.

But.

There is a recurring thread in IBM's memo that sort of invites the Judge to
continue what would otherwise be moot claims.

Why?

Reason 1. A fuller development of the case would be in the interests of
justice.

Yea. Right.

Reason 2. The Nazgul like to settle back and have a long leasurely chew on the
bones after a good dinner.

IANAL, IDEPOOTV
JG

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IBM on the Remains of the Day
Authored by: webster on Friday, August 31 2007 @ 08:47 PM EDT
..
1. Went to the IBM item first since it is more likely to spin toward reality.
They start succinctly:

****"(1) the Novell Decision effectively forecloses all of SCOís claims;
(2) requires summary judgment in favor of IBM on several of its counterclaims
and strengthens IBMís remaining counterclaims; and (3) impacts all of the
pending motions."****


2. IBM invites the Judge to rule on their motions on their own merits beyond
the Novell impact:

*********"deciding issues not addressed by the Novell Decision would
further develop the record, result in alternative grounds for the Courtís ruling
and streamline the resolution of IBMís remaining claims."******

Kimball hardly needs this advice. He does this regularly. It nails down his
decisions. He disposes of the "what if's" to save time and prevent
bother. They do it again for copyrights:

*****"resolving issues not addressed by the Novell Decision would further
develop the record, result in alternative grounds for the Courtís ruling and
streamline the resolution of IBMís remaining claims."*****

p. 3 (of the pdf). What a woeful state for any party to be in. (Alas, yes,
commiserating with SCO! ...Until we read their stuff.)

They do it yet again with the tortous interference claims:

*****"But here again, deciding issues not addressed by the Novell Decision
would further develop the record and, we submit, result in alternative grounds
for the Courtís ruling, such as the lack of evidence of interference by
IBM."*****

p. 5. That "lack of evidence" packs a sting. They'll be most pleased
if Kimball bothers to indulge them.

IBM goes on shamelessly begging for secondary merits beyond Novell foreclosures
with the unfair competition claim. It too packs a nostalgic sting:

*****"SCO failed to provide the detailed disclosures required by the Court
with respect to any allegedly misused code not subject to copyrights owned by
Novell."*********

p. 5. That lack of specificity raises its grizzled head again. Wells really
put it to them. Kimball will have to look deep in the well during these
arguments. IBM will argue from their knees as earnest as the knee-walkers at
Guadalupe. Talk about delay. IBM wants it all etched in stone. They will make
all this work as easy for the judge as possible.



3. Counterclaims: how anti-climactic. One must soldier on though. They are
so clear and concise. They have eleven counter claims. ... After some
consideration, these are more fun than thought. IBM is honest and candid,
nothing like a SCO gloat. Imagine how SCO would crow if they won something.
The Novell decision mandates judgment for IBM in their two claims for a
declaration of non-infringement of SCO's nonexistent copyrights. They note that
IBM has other licenses to the code in question, SCO is estopped, and SCO misused
the copyrights. Pile it on!

4. Counterclaim - contract. IBM now says that the court must grant summary
judgment in the contract claim despite the fact that they did not move for
summary judgment. But after all, it was an "irrevocable" license.
SCO can't spell it.

5. IBM also accused SCO of putting IBM code in Linux, copyright infringement,
and breach of GPL. Yes, IBM did s-p-e-c-i-f-y hundreds of thousands of lines of
code SCO sold with their Linux. IBM candidly admits that the Novell Decision
does not resolve these claims, but it does preclude their defenses. p. 8. Will
SCO insist on trying these issues with no Defenses?

6. The Four FUD Claims: These involve the FUD campaign, and "filing and
threatening to file baseless claims based on nonexistent contract rights and
copyrights, and attempting to license copyrights it did not own for the use of
Linux." p. 9. They candidly admit that the Novell Decision did not
resolve these claims but that it establishes the falsity of SCO's claims and
undermines their claims of privilege and good faith. p. 9. This is a strong
position to be in. It is also rare and dangerous for all that touch SCO.

7. IBM lists all the remaining motions. They are precluded also but they make a
final plea for the judge to address them anyway to "further develop the
record." p. 11. With that they upturned a filmy decanter and enjoyed the
experience if not the taste.

---
webster


© 2007 Monopoly Corporation. ALL rights reserved. Yours included.

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Why dismissed, not granted?
Authored by: Aim Here on Friday, August 31 2007 @ 08:52 PM EDT
I see that SCO wants the Copyright and Contract PSJs dismissed as moot on grounds of the waiver, rather than granted for that same reason (the waiver argument was made by IBM in the course of arguing both SJs, so either way is perfectly reasonable).

I'm trying to think why SCO prefers the matter dismissed, not decided, and my only guess is that were these motions to be granted, then Kimball might feel inclined to enumerate more than just one reason for doing so to his order(s), which would make it harder for SCO to dig the corpse of their claims up and make IBM fight them again later on, come appeal-time. In fact, SCO hints at it when appealing to Kimball's laziness/sense of judicial economy (delete as appropriate):
The Court is able to dismiss these claims on the basis of its determination in the Novell Order that Novell had the right to waive SCO's contract claims, thus rendering a decision on the other grounds asserted in this motion unnecessary.
Anyone else got any better theories?

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Will we see a GPL ruling?
Authored by: TJ on Friday, August 31 2007 @ 09:06 PM EDT
IBM has asserted three claims against SCO relating to SCO's copying of IBM code in Linux:
...
(2) breach of the General Public License (the "GPL") (Counterclaim VI)
...
IBM claims that SCO literally copied and distributed hundreds of thousands of lines of IBM code, which IBM contributed to Linux under the GPL, after SCO lost permission to do so by repudiating and breaching the GPL.

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IBM and SCO File Reports on What They Think Remains in That Case
Authored by: Yossarian on Friday, August 31 2007 @ 09:48 PM EDT
> Any hope is at the appellate level

What hope is there?

Appeal courts are not friendly to people who refuse to show
their cards in discovery. SCO will have to appeal only with
what Novell or the trial judge had seen.

IMO the only goal of the appeal is to burn time and money,
hoping that Novell and/or IBM will just get tired of the chase.

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IBM and SCO File Reports on What They Think Remains in That Case
Authored by: wharris on Saturday, September 01 2007 @ 12:03 AM EDT
While I am not pleased with how long this case has drug on, I have to admire
how clever it looks like it will be resolved. SCO has admittted in writing that

the Novel order "resolves" six of SCO's causes of actions. Thus, if
Kimball
wished, his order granting (many of) IBM's summary judgements could be as
short as "Both parties agree that Novel Order xx-whatever-don'tknow-thecite

decides this issue in favor of IBM".

Here's why that is so clever: The IBM case is an enormously huge stinking pile
of garbage. It involves code orignally written by AT&T Bell Labs, which
might
include BSD code, which might or might not follow the BSD liscensing
requirements; possible additional code that may or may not have been
written by USL, Novell, Sequent, IBM, or either of the SCOs and might or
might not be copyrightable, .... in short, exactly the enviroment where
Boisess will attempt to Bamboozle someone.

In contrast, Novel is a much simpler case; the APA clearly states that Novell
keeps the copyright and has the right to waive any contract breeches. Much
less chance of bamboozlement. If SCO can't overturn the Novell ruling, then
once an appeals court reads their admission that it "would resolve these
claims" (gotta love their phrasing), it would toss an appeal of the IBM
case
overboard.

My hope--and expectation-- is that Kimball's ruling will be coprehensive and
give several reasons why SCO is not just wrong, but knew it was wrong when
it started the case. After all, now that there is one rock-solid-admitted-by-
SCO reason for denying their claims, why not include several more?

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SCO's Feudian Slip
Authored by: DaveJakeman on Saturday, September 01 2007 @ 06:36 AM EDT

EFFECT OF THE ORDER ON THE PARTIESí PENDING MOTIONS (5):

The Court is able to dismiss these claims on the basis of its determination in the Novell Order that Novell had the right to waive SCOís contract claims, thus rendering a decision on the other grounds asserted in this motion
I think SCO missed off an "unnecessary.", but someone doing a hurried copy-and-paste didn't quite select all the text. The error is in the PDF too. Heh.

---
Only two things are infinite: the universe and human stupidity Ė and I'm not sure about the former. -- Einstein

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"to further develop the record"
Authored by: Anonymous on Saturday, September 01 2007 @ 09:55 AM EDT
IBM says "to further develop the record" when discussing each claim.

To me, it sort of sounds like, "Even though you could rule against SCO
based solely on this ruling in the Novell case, please allow us to first
establish all the *other* reasons that SCO's positions are nonsense".

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Preparing the Remains; SCO's State of the Union Address
Authored by: webster on Saturday, September 01 2007 @ 08:15 PM EDT
.
.

1. SCO's approval rating is low. Let's see if this statement helps. One has
to suppress the distaste mounting after PJ's article. Without Kimball's
decision or IBM's statement, one only reads with the premises that they have no
copyrights and Novell has waived their claims. Their front should be more than
brave, but it is starting to be sad and pathetic.

2. The distaste rises with SCO's two references to further argument in the
introductory paragraph. Please, guys! You must presume the Judge's order as a
real basis in fact and move on from there. One shouldn't go back and argue in
this statement. Why do they relentlessly ruffle the court with such feigned
obtusions? Just do the job. Don't even refer to arguments! It is not welcome
or appropriate in this document. {This outrage is already longer than their
statement thusfar or heretofore!}

3. SCO must believe the Rules of Procedure don't apply to them. They do. They
can presume them. They don't have to state the obvious, or that which goes
without saying, or that which becomes obnoxious and gives lawyers a bad name.
The following is unnecessary, goes without saying, is not waived if not stated:

************"SCO is not voluntarily dismissing these claims... Because
these are separate cases, SCO submits it is appropriate that the resolution of
these claims be reflected in a separate Order, and Judgment. This statement is
without prejudice to SCO's right to pursue motions for reconsideration and
appellate rights in both the IBM and Novell actions."**************

p. 2. It is like they presume this is Kimball's first case. Of course each
case needs its order and of course there are appeals. They are not dealing with
fools.

4. They are curt with their claims mostly averring that the order does not bear
on the various surviving claims. They somehow claim the survival of a copyright
claim.

5. SCO declares that the order "does not resolve any of the
Counterclaims." p. 3. SCO is having trouble reading between the lines.

6. They deny that IBM's MSJ's on counterclaims have been decided. Well not
explicitly. They then do the opposite of IBM, urging the Court to just rule on
the Novell waiver finding and not address any of the alternative grounds
propounded by IBM in various motions. They are trying to keep their appeal
hurdles low.

7. This was a grim document to pen for the SCOfolk. As steadfast advocates,
they have long had to ignore the obvious. So they say the order does not bear
on a particular motion literally, though the Summary Judgment encompasses and
disregards all the evidence and argument they presented. What a heartless chore
they pursue! If it wasn't for the money....

8. It was an adequate and and even clever statement. But it's like being
forced to write your own obituary on Death Row. Why is the judge making them
participate with the gory details? They'd love for someone else to mop up.

---
webster


© 2007 Monopoly Corporation. ALL rights reserved. Yours included.

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IBM and SCO File Reports on What They Think Remains in That Case
Authored by: Filias Cupio on Sunday, September 02 2007 @ 11:45 PM EDT
IANAL, so there are probably errors in what follows. Corrections and
reformatting are welcome.

Here is my "table" comparing IBM and SCO's reports. In all cases where
IBM says the Novell decision decides something in their favour, they also would
like their other arguments considered, so each decision in their favour can be
on multiple grounds.

SCO I (breach of the IBM Software Agreement)
IBM: PSJ in favour of IBM
SCO: PSJ in favour of IBM

SCO II (breach of the IBM Sublicensing Agreement)
IBM: PSJ in favour of IBM
SCO: PSJ in favour of IBM

SCO III (breach of the Sequent Software Agreement)
IBM: PSJ in favour of IBM
SCO: PSJ in favour of IBM

SCO IV (breach of the Sequent Sublicensing Agreement)
IBM: PSJ in favour of IBM
SCO: PSJ in favour of IBM

SCO V (copyright infringement)
IBM: PSJ in favour of IBM
SCO: PSJ in favour of IBM

SCO VI (unfair competition)
IBM: PSJ in favour of IBM
SCO: Unaffected by Novell

SCO VII (IBM interfered with SCO's business relationship with 175 companies)
IBM: Strengthens IBM
SCO: Unaffected by Novell

SCO VIII (tortious interference with Novell)
IBM: PSJ in favour of IBM
SCO: PSJ in favour of IBM

SCO IX (IBM interfered with SCO's business relationships with six other
entities)
IBM: Strengthens IBM
SCO: Unaffected by Novell

IBM I (breach of contract)
IBM: "While IBM did not move for summary judgment on this claim, a finding
of liability could be entered in favor of IBM based on the Novell Decision
alone."
SCO: Unresolved

IBM II (violation of the Lanham Act)
IBM: Unresolved, but strengthens IBM
SCO: Unresolved

IBM III (unfair competition)
IBM: Unresolved, but strengthens IBM
SCO: Unresolved

IBM IV (intentional interference with prospective economic relations)
IBM: Unresolved, but strengthens IBM
SCO: Unresolved

IBM V (violation of the New York State Unfair and Deceptive Trade Practices
Act)
IBM: Unresolved, but strengthens IBM
SCO: Unresolved

IBM VI (Breach of GPL)
IBM: Unresolved, but strengthens IBM
SCO: Unresolved

IBM VII (Promissory estoppel)
IBM: Unresolved, but strengthens IBM
SCO: Unresolved

IBM VIII (Copyright infringement of IBM's code in Linux)
IBM: Unresolved, but strengthens IBM
SCO: Unresolved

IBM IX (declaration of non-infringement of copyright in AIX and Dynix)
IBM: decided in favour of IBM, although no PSJ motion has been made.
SCO: Not discussed directly (as no PSJ motion pending?) but they say "The
Order, in SCO's view, does not resolve any of the Counterclaims."

IBM X (declaration of non-infringement of copyright in Linux)
IBM: PSJ in favour of IBM
SCO: Unresolved, in so far as we can still use post-1995 UnixWare copyrights

IBM XI (declaration of IBM's rights under all of its other claims)
IBM: not discussed
SCO: not discussed (but included in blanket "unresolved" comment.)

Five other motions being pursued by SCO
IBM: all mooted.
SCO: none mooted.

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