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AutoZone's Reply Memoranda
Wednesday, June 09 2004 @ 04:09 PM EDT

AutoZone has filed its Reply Memorandum in Support of Its Motion to Transfer Venue and its Reply Memorandum in Support of its Motion To Stay or, In the Alternative, for a More Definite Statement. Attached to the latter is SCO's Opposition to Red Hat's Motion for Reconsideration, which AutoZone quotes from most effectively to make mincemeat of SCO's argument opposing the court's granting of AutoZone's request for a stay. In fact, AutoZone has attached a number of IBM documents too. And they devastatingly use some of Darl McBride's public statements. They so want the judge in Nevada to get the *whole* SCO picture, not just the face SCO is presenting in Nevada, particularly because SCO has said things in other courts that can trip them up in AutoZone. It's a tour-de-force performance by AutoZone's lawyers. I'd hire this firm in a New York minute.

In the first memorandum, AutoZone points out that cases of infringement should be brought where the act of infringement occurred, because that's where the evidence is located. That, they point out, would be Tennessee, not Nevada. As for SCO's alternative request that the case be sent to Utah if it can't stay in Nevada, AutoZone curtly points out it isn't any more convenient to them than Nevada and they have less of a tie to that state than to Tennessee. If SCO wanted to argue that it was more convenient for them in Nevada, or Utah, they should have so argued. They certainly can't say, and anyway they didn't argue it, that cases are heard faster in Utah than in Tennessee. While it is true that the plaintiff gets to pick the place to file, they can't just stick a pin in a map. There has to be some reason, even if it's just convenience. There has to be some connection on somebody's part to that state, and AutoZone says Nevada isn't where they have the strongest tie. The operative facts occurred in Tennessee and that is where the relevant witnesses and documents are. The evaluation and installation of Linux was done nationwide for the company from Memphis, and maintaining the computer network is done there too.

Evidently, the courts there are a lot faster than in Nevada or Utah. AutoZone did its math: "If SCO is truly concerned about the purported irreparable harm it is suffering," it notes deadpan, "by virtue of AutoZone's alleged copyright infringement, SCO would support transfer to the Western District of Tennessee where the case would proceed to trial an average of 14 months sooner than in Nevada (and 9 months sooner than in Utah)."

And SCO has zero ties to that state. As for Utah, while noting that SCO is "[a]pparently second-guessing its forum selection decision in light of AutoZone's motion," that state is even less appropriate. "AutoZone's only relation to Utah is that it operates a handful of stores in the state." No witnesses are there. No documents. None of the operative facts happened there. Cases make it to trial 33% faster in Tennessee than in Utah. I think we can all testify to how glacial the Utah pace has been.

It doesn't make sense, they point out, to join this case to IBM or Novell, because Novell is about issues of fact and law that aren't at issue here. And IBM is so far ahead in terms of where they are in the stream of preparation for the trial, it wouldn't make sense to add on a case that is only starting. For all those reasons, and a lot more, AutoZone says they'd like the court to send this stupid case to Tennessee.

In the Reply Memorandum on the stay or more definite statement, AutoZone elegantly opens with this use of SCO's Red Hat papers:

"Plaintiff The SCO Group, Inc. ("SCO") has effectively conceded in the Red Hat litigation that AutoZone, Inc. ("AutoZone") is entitled to a stay of SCO's claims in the present action. As AutoZone noted in its opening brief, the District of Delaware stayed the Red Hat case sua sponte -- albeit with SCO's encouragement -- pending resolution of SCO's lawsuit against IBM in Utah. Red Hat has recently moved the court to open the stay. In opposing Red Hat's motion, SCO stated:

'[T]here is no doubt that, as it is presently constituted, the IBM case will address central issues raised in [the Red Hat] lawsuit. Therefore, it would be a "waste of judicial resources," and the resources of the parties, to litigate [the Red Hat] case while a substantially similar question is being litigated in federal district court in Utah.' . . .

"SCO further stated to the court:

'[T]he Court correctly observed that the IBM case will address a central issue in [the Red Hat] case: whether Linux contains misappropriated UNIX code. As noted in the Court's Order, this issue is raised by SCO's claim for breach of contract arising from IBM's contributions of code to Linux in violation of its contractual obligations.' . . .

"How SCO can contend that 'there is no doubt' that the IBM case will resolved the threshold issues in the Red Hat case, yet deny the same in this case is unclear in light of the fact that SCO's claims against AutoZone relate to AutoZone's use of a version of Linux that AutoZone obtained from Red Hat. . . .

"AutoZone submits that SCO's statements to the court in the Red Hat case justify the stay of this case without further consideration of the merits of AutoZone's motion."

"Unclear", eh? Nice touch. I can almost see the bow from the attorney, removing his Cyrano de Bergerac hat, with a plume, no doubt, as he glances over at the SCO team and with a twinkle in his eye mouths, "Touche! Take that! Your cunning doublespeak is your undoing."

Of course, they don't stop there. Lawyers don't stop until they have touched each and every possible base. You just never know which argument will hit the judge just right. That's why judges so often interrupt them in the middle of a sentence. They know they'll just keep on going and going and going otherwise. So they point out that they "can't even identify with certainty what SCO is claiming. SCO is therefore not properly entitled to a presumption of irreparable harm in this case." AutoZone isn't distributing SCO's software, so where is the harm to SCO's business if there is a stay? They sell auto parts. They only use Linux internally, because they like to use it for their business internally. Even if they were to make an internal copy, the only argument SCO could conceivably make is that they lost a license fee (and only if you accept they have any right to make such a claim), and monetary damages do not, by law, constitute irreparable harm. Anyway, they point out in a footnote, SCO isn't looking to make AutoZone stop using Linux. They just want them to pay a license fee, judging from a quote by the quotable Darl in CRN.com on November 18, 2003, when he said SCO wasn't looking to "blow up Linux" but "to get a transaction fee every time" it is sold.

Anyway, SCO knew or should have known AutoZone was using Linux back in 1999, when Red Hat issued a press release about it. Let's get down to the basics, they say. SCO is a distributor of both UNIX and Linux, so "SCO has long possessed the knowledge necessary to determine whether the source code of Linux infringed any SCO copyrights in the source code of UNIX." So why did they wait at least ten months, or several years, depending on whether you count from the May 2003 Dear Linux user letter or the press release, to bring an action, if they can't afford to wait? Then they quote from a case: "An unreasonable delay suggests that . . . any harm suffered by the plaintiff is not so severe as to be 'irreparable'."

How do you like their next killer argument? They point out that SCO has been aggressively fighting to stay the Red Hat case:

"despite the fact that Red Hat is one of the leading distributors of Linux in the United States. SCO's case for prejudice or irreparable harm is clearly more relevant in a case against a leading distributor of the alleged infringing product than in a case against a single end user of the product like AutoZone. If SCO was genuinely concerned about irreparable harm associated with the continued distribution and use of Linux, common sense suggests that SCO would be seeking to move the Red Hat case forward as quickly as possible -- rather than pursuing a single end user."

Cute, no? I just love their sense of humor. They didn't shuffle red and blue papers into a stack of white ones and call anyone a liar, like Mr. Hatch's performance art "anger" yesterday, but they actually did call SCO's bluff very effectively.

There is plenty more enjoyment in the Memorandum. I actually laughed out loud at this :

"SCO repeatedly notes that the present case should not be stayed pending resolution of the IBM, Red Hat, and Novell cases because those cases may settle or be resolved on legal or factual grounds unrelated to the issues in the present case. ... SCO does not cite any authority for denying a motion to stay because of the possibility that the pending actions might settle or be resolved on grounds unrelated to the present case."

SCO is so outclassed here. It's like Clare Boothe Luce thinking she could spar with Dorothy Parker and win. Did you ever hear that story? At a gathering, Luce and Parker were at a doorway, and Luce indicated Parker should go ahead of her, cattily saying "Age before beauty," to which Parker instantly quipped as she breezed past Luce, "Pearls before swine."

Like Luce, SCO would have been better off had it picked a different opponent.


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