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SCO's Corrected Motion to Dismiss or Stay
Tuesday, April 27 2004 @ 07:48 PM EDT

Here is SCO's Corrected Motion to Dismiss or to Stay Count Ten of Counterclaim-Plaintiff IBM's Second Amended Counterclaims Against SCO which now matches SCO's Memorandum, which the earlier version did not.

This corrected motion does not ask in the alternative that it be separated. And it is silent on Counts 9 and 14, unlike the confusing original motion of earlier today.

Here they are sticking to essentially the argument they lost in Red Hat, asserting that there is no case or actual controversy to justify a declaratory judgment with respect to IBM's Tenth Counterclaim.

IBM is asking for a declaratory judgment "that IBM does not infringe, induce infringement of, or contribute to the infringement of any SCO copyright through its Linux activities, including its use, reproduction and improvement of Linux, and that some or all of SCO's purported copyrights in UNIX are invalid and unenforceable."

SCO argues that this means that IBM is "seeking to declare that a person or entity using Linux does not infringe upon SCO's copyrights and that some or all of SCO's copyrights are invalid or unenforceable." Since that is, according to them, the very issue being litigated in the AutoZone case, and it was filed prior to IBM filing its Tenth Counterclaim, the AutoZone case should decide this issue. So they ask the court to dismiss or in the alternative to stay until the AutoZone case is decided.

But IBM isn't asking what SCO says they are asking, to my reading. They are asking that IBM's activities with respect to Linux be declared noninfringing. Their "Linux activities" and an autoparts company's activities switching to Linux are not the same at all. IBM has donated code to Linux. They are not just "using" Linux. So their "Linux activities" go beyond mere "use" and are not identical to AutoZone's by a long shot. If AutoZone's case is resolved, would that resolve whether IBM's Linux activities, which include use, reproduction and improvement, not just use, were or were not infringing? I don't see how.

Of course, AutoZone has asked that its case be stayed until IBM, Red Hat and Novell get decided. And at least one judge has already ruled that Red Hat should wait until IBM's case is decided, so we seem to be in some kind of a loop. That may be the point of this motion, actually.

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

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

Stephen N. Zack (admitted pro hac vice)
Mark J. Heise (admitted pro hac vice)
David K. Markarian (admitted pro hac vice)
BOIES, SCHILLER & FLEXNER LLP
[address, phone, fax]

Attorneys for PLaintiff/Counterclaim Defendant

____________________________________

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH

____________________________________

THE SCO GROUP, INC.,

Plaintiff,

vs.

INTERNATIONAL BUSINESS MACHINES CORPORATION,

Defendant.

______________________________________

CORRECTED MOTION TO DISMISS OR TO STAY COUNT TEN OF THE COUNTERCLAIM-PLAINTIFF IBM'S SECOND AMENDED COUNTERCLAIMS AGAINST SCO

Case No. 2:03CV0294DAK

Hon. Dale A. Kimball

Magistrate Judge Brooke Wells

_________________________________________

Plaintiff/Counterclaim-Defendant The SCO Group ("SCO"), by and through undersigned counsel, hereby moves the Court pursuant to Federal Rule of Civil Procedure 12(b) for dismissal, or, in the alternative, to stay Count Ten of Counterclaim-Plaintiff International Business Machines Corporation's ("IBM") Second Amended Counterclaims against SCO.

SCO bases its Motion on the following grounds:

On March 29, 2004, Defendant/Counter-Plaintiff International Business Machines Corp., ("IBM") filed its "Second Amended Counterclaims Against SCO." In Count Ten of that pleading, IBM added an entirely new claim seeking a declaratory judgment "that IBM does not infringe, induce infringement of, or contribute to the infringement of any SCO copyright through its Linux activities, including its use, reproduction and improvement of Linux, and that some or all of SCO's purported copyrights in UNIX are invalid and unenforceable." Paragraph 173. In other words, IBM is seeking to declare that a person or entity using Linux does not infringe upon SCO's copyrights and that some or all of SCO's copyrights are invalid or unenforceable.

These issues are being litigated in a case filed by SCO against AutoZone in federal district court in Nevada; a case that was filed prior to IBM's filing its Tenth Counterclaim. See The SCO Group Inc. v. AutoZone, Inc., Case No. CV-S-04-0237-DWH-LRL (D. Nev. 2004). This newly added counterclaim raises issues separate and apart from the primary breach of contract and other direct claims and counterclaims in this case. Given this fact, and to avoid multiple suits determining substantially similar issues, this Court should decline to exercise jurisdiction over and dismiss Counterclaim Ten. In the alternative, Counterclaim Ten should be stayed pending the outcome in the prior filed AutoZone case.

SCO's Motion is supported by the Memorandum in Support of Motion to Dismiss or to Stay Count Ten of Counterclaim-Plaintiff IBM's Second Amended Counterclaims Against SCO submitted concurrently herewith.

DATED this 26rd day of April, 2004.

Respectfully submitted,

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

BOIES, SCHILLER & FLEXNER LLP
Stephen N. Zack
Mark J. Heise
David K. Markarian

Counsel for Plaintiff/Counterclaim defendant.


CERTIFICATE OF SERVICE

I hereby certify that I caused a true and correct copy of the foregoing to be mailed, postage prepaid, this 26th day of April, 2004, to the following:

By Email and U.S. Mail:

Alan L. Sullivan, Esq.
Todd Shaughnessy, Esq.
Snell & Wilmer L.L.P.
[address, email]

By U.S. Mail:

Evan R. Chesler, Esq.
Cravath, Swaine & Moore LLP
[address]

Donald J. Rosenberg, Esq.
[address]

________[signature]_________

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

Here is IBM's Tenth Counterclaim:

Declaratory Judgment of Noninfringement of Copyrights

168. IBM repeats and realleges the averments in paragraphs 1 through 167 with the same force and effect as though they were set forth fully herein.

169. As discussed above, SCO purports to hold copyrights relating to UNIX software.

170. SCO has sued IBM claiming that IBM has infringed, induced the infringement of, and contributed to the infringement of, SCO's purported UNIX copyrights by, among other things, continuing to "reproduce, prepare derivative works of, and distribute copyrighted UNIX materials through its activities relating to Linux".

171. IBM does not believe that its activities relating to Linux, including any use, reproduction and improvement of Linux, infringe, induce the infringement of, or contribute to the infringement of valid, enforceable copyrights owned by SCO.

172. An actual controversy exists between SCO and IBM as to the noninfringement of SCO' s copyrights and the validity of any purported SCO copyrights concerning UNIX.

173. IBM is entitled to a declaratory judgment pursuant to 28 U. C. 9 2201 that IBM does not infringe, induce the infringement of, or contribute to the infringement of any SCO copyright through its Linux activities, including its use, reproduction and improvement of Linux, and that some or all of SCO' s purported copyrights in UNIX are invalid and unenforceable.


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