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What's Wrong with Enderle's "Legal" Strategy
Thursday, April 08 2004 @ 08:12 PM EDT

Mr. Enderle, SCO's true believer, has written that if he were on a jury, he'd vote for SCO. That, of course, does not amaze you. He has also given us a heads up on what he believes they will tell a jury and why he thinks it will convince them. Unfortunately for Mr. Enderle's theory, he doesn't understand that when you ask for a declaratory judgment, as IBM has on its counterclaims, the jury doesn't decide it. Declaratory judgments are decided by the judge.

It's of interest to study what Enderle says is likely to be their strategy. It may finally explain why SCO so urgently wanted the world to know that they had been allegedly "attacked". Normal companies hide such information at all costs. But SCO puts out press releases and gives interviews about being allegedly "attacked" over and over and over. They need to be attacked in order to win with a jury, according to Enderle's "legal" theory. The problem with his theory is, it isn't legally possible for them to argue what he suggests they will:

SCO's Likely Argument.

The typical jury, in the artificial courtroom environment, will find my depiction of SCO's likely argument quite compelling.

Here's that story in a nutshell:

  1. Small company buys product.
  2. Big company steals product.
  3. Big company attacks other companies.
  4. Small company attempts redress through the courts.
  5. Small company gets violently attacked.
"If the facts support this simple story, I believe a typical jury will have a hard time not finding for the small company. Particularly if I toss in the fact that the small company is run by Mormons and the big company is portrayed like WorldCom or Enron.

I haven't seen yet any facts that would support this "simple story" and they have their work cut out for them trying to make IBM look like Enron. For one thing, they can't bring in the Mormon or Enron part, because it's irrelevant or improper. And they can't say steal, because it's about contract, not theft. They can't argue anything they can't prove. That's the difference between the media and a courtroom. There will be no mention of any attacks in a trial unless they have a witness, or some other evidence, to prove that the "attack" was by IBM. Attacks are irrelevant to the issues unless there is an attack by a party.

But telling us what the strategy is helps me to understand something we have all puzzled over. If SCO thinks they can bring this nonsense up at trial, could that be why they keep talking about this? SCO may be exaggerating any threats or attacks, if they aren't making them up out of whole cloth in some cases, because they think they can use it at trial. We wondered why they included such "facts" in their SEC filings, even when the deadline for the filing preceded the alleged "attack" and why they fingered "the Linux community" as perpetrator, despite having no facts to back it up or ignoring evidence that the MyDoom attack came from professional spammers in Russia. If I remember correctly, they even implied once that IBM might be behind the "attacks". If Enderle knows what he is talking about, and this reallly is the SCO legal strategy, it seems they will be hoping to present such "evidence" to the jury, so they are creating some "evidence", which of course some in the mainstream media helped them to do by printing whatever they were told without doing any digging as to whether it was true. But, again, they can't argue what is not proven and they can not prove what is not relevant. They might try to squeeze it in on the rhetorical margins, if the judge doesn't catch it.

If this is their strategy, I think they will go down in flames. Mr. Enderle has a lower opinion of jurors than I do. The way he disparages jurors in his article is offensive and, in my experience, inaccurate. It wouldn't amaze me, if Enderle were ever to testify at trial, that IBM might bring what he wrote to the jury's attention.

But the simple fact is, this jury isn't likely to be deciding everything, if they ever get to decide anything at all, because IBM has asked for a declaratory judgment on its counterclaims, and that's a lot of the story. Judges decide those, and he isn't going to be moved by such nonsense as Enderle proposes. Earlier rulings by Judge Kimball have shown that he doesn't favor the LDS church in his courtroom, despite being a Mormon himself, and he has ruled against local companies in favor of outsiders. And he understands the tech. Anyway, unless SCO can produce some allegedlly infringing code soon, this case is unlikely to ever reach a jury.

Here's what IBM has asked Judge Kimball to decide, according to IBM's Second Amended Counterclaims' relief paragraphs:

e) granting IBM declaratory relief, including a declaration that (i) that IBM does not, through its reproduction, improvement, and distribution of AIX and Dynix, infringe, induce the infringement of, or contribute to the infringement of any valid and enforceable copyright owned by SCO; (ii) that IBM does not, through its Linux activities, including its use, reproduction and improvement of Linux, infringe, induce the infringement of, or contribute to the infringement of any valid and enforceable copyright owned by SCO; (iii) SCO has violated IBM's rights as outlined above by breaching its contractual obligations to IBM, violating the Lanham Act, engaging in unfair competition, interfering with IBM's prospective economic relations, engaging in unfair and deceptive trade practices, breaching the GPL, infringing IBM copyrights and infringing IBM patents; (iv) SCO has no right to assert, and is estopped from asserting, proprietary rights over programs that SCO distributed under the GPL except as permitted by the GPL; and is not entitled to impose restrictions on the copying, modifying or distributing of programs distributed by it under the GPL except as set out in the GPL; and (v) any product into which SCO has incorporated code licensed pursuant to the GPL is subject to the GPL and SCO may not assert rights with respect to that code except as provided by the GPL;

(f) granting IBM injunctive relief, enjoining and restraining SCO and its affiliates, subsidiaries, officers, agents, servants, employees, attorneys, successors and assigns and all others persons acting in concert with them, from further violating IBM's rights as described above, including in particular from (i) misrepresenting SCO's rights and IBM's rights to Unix technology, such as that SCO can, will or has in fact revoked IBM right to use Unix, (ii) misrepresenting that IBM no longer has the right, authority and license to use, produce and distribute AIX, Dynix and IBM's Linux-related products; (iii) publishing false and disparaging statements about AIX, Dynix and IBM's Linux-related products; (iv) engaging in further acts of unfair competition; (v) claiming certain ownership rights over programs made available under the GPL; (vi) engaging in unfair and deceptive trade practices; (vii) further infringement of IBM's copyrights; and (viii) further infringement or inducement of infringement of the 746, 209 and 785 Patents;

If Judge Kimball grants their request for a declaratory judgment, important issues will bypass the jury completely. Now declaratory judgments are not guaranteed to you, just because you asked, and SCO has requested a jury trial of "all issues raised in IBM's amended counterclaims that are so triable". But if SCO is relying for a win based on a prejudiced jury pool of doddering old people who can't grasp technical arguments and root only for home team companies, as Mr. Enderle posits, they have hung their legal hopes on a mighty thin string indeed. What he doesn't seem to know is that the judge can effectively overshadow and contradict the jury, with the declaratory judgment and injunctions. Further, because IBM can ask for a summary judgment on the GPL at least, and on some other matters if SCO doesn't cough up some code, we might get some relief early and make the jury part on derivative code nearly irrelevant.

How foolish SCO and its little helpers are to broadcast their legal strategy, if that is what this was. It only tips IBM off, and in any case, in asking for a declaratory judgment, which I expect will not be the last thing they ask for, they made a very strong move that checkmates Mr. Enderle's fantasy scenario.


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