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AutoZone's Reply Memorandum in Support of Motion to Stay or For More Definite Statement - as text
Monday, June 21 2004 @ 04:12 PM EDT

Here's AutoZone's Reply Memorandum in Support of its Motion to Stay Or, In the Alternative, For a More Definite Statement as text. Thanks so much to Steve Martin for doing the work.

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

James J. Pisanelli
Nevada Bar No. 4027
Nicki Wilmer
Nevada Bar No. 6562
SCHRECK BRIGNONE
[address]
[phone]

Michael P. Kenny, Esq.
James A. Harvey, Esq.
David J. Stewart, Esq.
Christopher A. Riley, Esq.
Douglas L. Bridges, Esq.
ALSTON & BIRD LLP
[address]
[phone]

Attorneys for Defendant AutoZone, Inc.

UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA

THE SCO GROUP, INC.
a Delaware Corporation

Plaintiff,


v.

AUTOZONE, INC.
a Nevada Corporation

Defendant
Civil Action File No.

CV-S-04-0237-RCJ-LRL

DEFENDANT AUTOZONE, INC.'S REPLY MEMORANDUM
IN SUPPORT OF ITS MOTION TO STAY OR, IN THE
ALTERNATIVE, FOR A MORE DEFINITE STATEMENT

INTRODUCTION

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.
Red Hat v. SCO, Opp'n to Red Hat's Mot. For Recons., at 4 (emphasis added) (hereinafter "SCO Opp. to Recons.") (attached hereto as Ex. A).

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.
Id. at 3.

How SCO can contend that "there is no doubt" that the IBM case will resolve 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. Nevertheless, what is clear from SCO's own admissions, as well as the other facts and authority addressed below, is that this case should be stayed pending resolution of the IBM case as well as the Red Hat and Novell cases.

UPDATE ON CURRENT LITIGATION INVOLVING UNIX AND LINUX

A. SCO Group, Inc. v. Novell, Inc., No. 2:04CV00139 (D. Utah filed Jan. 20, 2004)

On May 11, 2004, the court in the Novell case heard oral argument on Novell's Motion to Dismiss and SCO's Motion to Remand. The court took the motions under advisement and has not issued a ruling to date.

B. SCO Group, Inc. v. Int'l Bus. Mach. Inc., No. 2:03CV294 (D. Utah, filed Mar. 25, 2003)

On April 23, 2004, SCO moved to dismiss or stay IBM's Tenth Counterclaim, which seeks a declaratory judgment 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." See SCO v. IBM, Mot. to Dismiss, or to Stay Count Ten of Coutercl.-Pl. IBM's Second Amended Countercl. Against SCO (hereinafter "SCO Mot. to Dismiss or Stay Count Ten") (attached hereto as Ex. B); SCO v. IBM, Second Am. Countercl. (attached to AutoZone Motion to Stay as Ex. J) 173. In its motion, SCO argues that the counterclaim should be dismissed or stayed because the subject matter of the counterclaim is directly at issue in SCO's action for copyright infringement against AutoZone. SCO Mot. to Dismiss or Stay Count Ten at 2.

IBM has opposed SCO' motion and moved for summary judgment on its Tenth Counterclaim. SCO v. IBM, Def./Countercl.Pl. IBM's Cross-mot. for Partial Summ. J. on Claim for Decl. of Non-Infringement (hereinafter "IBM Mot. for Partial Summ. J.") (attached hereto as Ex. C). The basis for IBM's motion is that discovery is nearly complete, yet SCO has "failed to come forth with evidence to demonstrate infringement" of SCO's copyrights by IBM. Id at 2. Specifically, IBM notes that SCO failed to produce "evidence that IBM's Linux activities infringe SCO's purported copyrights, despite the two court orders requiring it to do so." Id.

Briefing on these two motions is underway. A hearing on both parties' motions is scheduled for August 4, 2004.

C. Red Hat, Inc. v. SCO Group, Inc., No. 1:03CV772 (D. Del. Filed Aug. 4, 2003)

On April 21, 2004, Red Hat filed a Motion for Reconsideration of the court's sua sponte order staying the proceedings pending resolution of the IBM litigation. Red Hat v. SCO, Mot. for Recons. (attached hereto as Ex. D). As set forth above, SCO has aggressively opposed the motion on the basis that the previously filed IBM case will address the threshold issue of whether Linux misappropriates SCO's copyrights in UNIX. SCO Opp. to Recons. at 3, 4. The motion has been fully briefed by the parties, and is awaiting ruling by the court.

ARGUMENT AND CITATION OF AUTHORITY

A. The Court Should Stay this Case Pending Resolution of Previously Filed Actions.

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. Nevertheless, consideration of the merits only further supports the appropriateness of the stay AutoZone requests.

1. SCO Will Not be Prejudiced or Suffer Irreparable Harm if This Case is Stayed.

SCO's principal argument in opposition to AutoZone's Motion to Stay is that it will suffer irreparable harm if the case is stayed. SCO Brief at pp. 13-14. However, SCO fails to identify any specific harm that it will suffer that is truly irreparable in nature. SCO simply cites a case for the proposition that a showing of reasonable likelihood of success on the merits in a copyright infringement action raises a presumption of irreparable harm in the context of a motion for preliminary injunction. SCO Brief at p. 13.

As an initial matter, SCO has made no showing of "a reasonable likelihood of success on the merits" in this case. Indeed, as addressed in AutoZone's alternative motion for a more definite statement, AutoZone cannot even identify with certainty what SCO is claiming. SCO is therefore not properly entitled to a presumption of irreparable harm in this case. Nonetheless, even if such a presumption applied in this case, it would easily be rebutted.

This is not a case against a software distributor in which the defendant's continued use and distribution of an infringing product might irrevocably damage SCO's business. AutoZone is in the auto parts business and uses Linux solely for its own internal use. Even if AutoZone were to make additional copies of Linux for use on its internal servers while this case is stayed, the only true harm SCO would suffer from AutoZone's action is the loss of license fees SCO claims it would be owed.(1) The law is well settled that monetary damages do not constitute irreparable harm. See, e.g., Sampson v. Murray, 415 U.S. 61, 90 (1974); Lydo Enters., Inc. v. City of Las Vegas, 745 F.2d 1211, 1213 (9th Cir. 1984).

SCO's claim that it will suffer irreparable harm if this case is stayed is further rebutted by at least two other facts. First, SCO knew or should have known that AutoZone was using Red Hat Linux at least as early as 1999 when Red Hat issued a press release announcing the same. See Red Hat Inc. News Release -- 11/29/1999 (attached hereto as Ex. F). At the very least, SCO knew all facts necessary to file this action at least as early as May 2003, when SCO sent a letter to AutoZone stating that SCO "believe[s] that Linux infringes on [its] Unix intellectual property and other rights" and "intend[s] to aggressively protect and enforce these rights." See SCO Letter to AutoZone dated May 12, 2003 (attached hereto as Ex. G). As a distributor of both UNIX and Linux, 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. Notwithstanding this knowledge, SCO waited at least ten (10) months -- and perhaps as long as five (5) years -- from its first knowledge of AutoZone's use of Linux to file suit against AutoZone. Such delay in filing negates SCO's claim that it will be irreparably injured by a stay of this case. See Richard Feiner & Co v. Turner Entm't. Co., 98 F.3d 33, 34 (2nd Cir. 1996) ("An unreasonable delay suggests that ... any harm suffered by the plaintiff is not so severe as to be 'irreparable.'"); Tough Traveler, Ltd. v. Outbound Prods., 60 F.3d 964, 968 (2nd Cir. 1995) (delay of nine (9) months in filing suit evidence of lack of irreparable harm for issuance of preliminary injunction).

Second, SCO has aggressively sought 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.

Finally, it is worth noting that a stay of the present case does not mean that this case will start anew when the stay is lifted. The progression of the Novell, IBM, and Red Hat cases will undoubtedly aid discovery and clarify the issues in this case in a meaningful way. Relevant witnesses will be identified, responsive documents will be produced, and issues will be framed in the pending cases that will assist SCO and AutoZone in preparing this case for trial. The stay of this case will therefore not mean that the case will be truly idle.

2. AutoZone Will Suffer Meaningful Prejudice if the Case is Not Stayed.

SCO incorrectly contends that AutoZone cannot demonstrate that it will suffer any prejudice if this Motion is denied. SCO Brief at pp. 11-12. AutoZone undoubtedly will be prejudiced if it is forced to engage in the substantial time and expense of defending a copyright infringement action in a forum having no relation to the case while three (3) previously filed actions are pending which address threshold elements of SCO's claims against AutoZone. If any of several threshold issues are decided against SCO in those previously filed actions, SCO will be estopped from asserting its claims against AutoZone.

Additionally, the prejudice to the parties is simply one factor, and not a prerequisite, in granting a motion to stay. Filtrol Corp. v. Kelleher, 467 F.2d 242, 244 (9th Cir. 1972). For example, the court in the Red Hat case stayed its proceedings sua sponte without any analysis whatsoever of the respective prejudice on the parties. Red Hat v. SCO, Order (attached to AutoZone Motion to Stay as Ex. A) pp. 4-5.

In sum, AutoZone will suffer clearly demonstrable prejudice if the requested stay is denied, but SCO will suffer no identifiable prejudice or harm of any kind if a stay is granted.

3. Possible Settlement or Other Resolution of the IBM, Red Hat, or Novell Cases Does Not Affect AutoZone's Motion to Stay.

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 Brief at pp. 14, 15, 17. 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. Indeed, every case could potentially settle or be resolved on non-substantive grounds. Therefore, under SCO's logic, no case could ever be stayed pending resolution of a prior filed case that addresses the same or threshold issues. That is clearly not the law, no doubt in large part because it is equally possible that prior cases will not settle and will be decided on grounds that are dispositive of issues in later filed cases. See Gen-Probe, Inc. v. Amoco Corp. 926 F. Supp. 948, 963 (S.D. Cal. 1996) (granting stay in favor of prior filed case).

SCO's contention that the other cases might settle is also inconsistent with SCO's public pronouncements about the cases. As the court in Red Hat noted, "SCO has publicly stated that ... 'chances for negotiating with companies [like Red Hat] appear to be slim.'" Red Hat v. SCO, Order at p. 4 (quoting SCO public pronouncement). SCO's contention that a stay is inappropriate because the prior filed cases may settle is therefore meritless.(2)

4. The Previously Filed Cases Involve Seminal, Threshold Issues Regarding SCO's Claims of Copyright Ownership.

SCO's response brief ignores authority cited by AutoZone in its opening brief that a stay of proceedings is appropriate when issues of the ownership or validity of a patent (like a copyright) are at issue in a previously filed, pending action. AutoZone Motion to Stay at pp. 11-12. AutoZone discussed Gen-Probe, Inc. v. Amoco Corp. 926 F. Supp. 948, 963 (S.D. Cal. 1966), in which Amoco filed a motion to stay the proceedings pending the resolution of the CNS v. Gen-Probe case, a previously-filed case addressing the issue of ownership of patents that was an essential element of Gen-Probe's claim against Amoco. After Amoco argued that "if CNS were to succeed in its claims against Gen-Probe, Gen-Probe would be deprived of any ownership interest in the patents in suit, and would lack standing to complain even of Amoco's current acts of infringement," the district court granted the motion to stay pending the resolution of the CNS v. Gen-Probe case. Id. at 963-64.

SCO's only attempt to distinguish Gen-Probe is its mischaracterization of the case by stating that it involved parallel litigation between the same parties. SCO Brief at p. 18. Clearly, the two cases involved in Gen-Probe did not involve the same parties -- the first case was CNS v. Gen-Probe and the second case was Gen-Probe v. Amoco. Gen-Probe, 926 F. Supp. at 963-64. Rather, Gen-Probe is directly on point with the present case. If Novell succeeds in establishing that SCO has no ownership interest in the UNIX copyrights, SCO would lack standing to assert any claims of copyright infringement against AutoZone related to the UNIX copyrights. Similarly, if IBM or Red Hat establishes that whatever code or manuals SCO claims to have been infringed by Linux are not copyrightable, SCO would have no copyright to assert against AutoZone. Therefore, like the district court in Gen-Probe, this court should stay the present case pending the resolution of the copyright issues in the Novell case.

5. This Case Should be Stayed Under the First-to-File Rule.

SCO claims that AutoZone's Motion to Stay should be denied under the first-to-file rule. SCO's Brief at p. 17. However, the first-to-file rule is inapplicable under the facts of the case, and, even if it were, it would support the grant -- not the denial -- of this Motion.

As an initial matter, the case SCO cites in support of its position that the first-to-file rule justifies denial of AutoZone's motion holds that the rule only applies to actions involving the same parties. SCO Brief at p. 17; Alltrade, Inc. v. Uniweld Prods., Inc., 946 F.2d 622, 625 (9th Cir. 1991) ("[The first-to-file rule] may be invoked 'when a complaint involving the same parties and issues has already been filed in another district.'") (quoting Pacesetter Sys., Inc. v. Medtronic, Inc., 678 F.2d 93, 95 (9th Cir. 1982)). Neither the Novell, IBM, nor Red Hat cases share the same parties with each other or with this case. Accordingly, the first-to-file rule is inapplicable to this case under the very authority SCO cites to invoke the rule.

Even if the first-to-file rule did apply, however, it dictates that the present case should be stayed pending the resolution of the other, prior filed cases. The IBM case was filed on March 25, 2003 -- nearly twelve (12) months before the present case; the Red Hat case was filed on August 4, 2003 -- eight (8) months before the present case; and the Novell case was filed on January 20, 2004 -- nearly two months before the present case. Therefore, it is undisputed that these cases are all prior filed and that the first-to-file rule would direct that these cases be resolved before the instant action.(3)

SCO contends that the copyright claims in IBM case are junior to the issues in the present case because the issues were not at issue in IBM until IBM filed its Second Amended Counterclaims on March 29, 2004 (which added the Tenth Counterclaim). SCO's argument is misplaced because it ignores SCO's own admissions that threshold issues involving whether Linux misappropriates UNIX were already at issue in the IBM case well before IBM filed its Tenth Counterclaim. SCO stated in response to Red Hat's Motion for Reconsideration that the issue of whether Linux misappropriates UNIX code "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." SCO Opp. to Recons. at 3. SCO asserted this claim in its original Complaint against IBM (attached to AutoZone Motion to Stay as Ex. C), which SCO filed on March 6, 2003 -- one year before SCO filed the present action. SCO expanded and clarified this claim in its First Amended Complaint against IBM (attached to AutoZone Motion to Stay as Ex. O), which SCO filed on June 16, 2003 -- nine months before SCO filed the present lawsuit.

Even assuming that the IBM case did not address issues of infringement until IBM filed its Second Amended Counterclaims, IBM's amendment relates back to the date on which it filed its original counterclaims for purposes of the first-to-file rule, or August 6, 2003 -- eight (8) months prior to SCO's lawsuit against AutoZone. Ramsey Group, Inc. v. EGS Intl', Inc., 208 F.R.D. 559, 564-65 (W.D.N.C. 2002) (amendment to complaint relates back to original filing date for purposes of first-to-file rule); Employees Savs. Plan of Mobil Oil Corp. v. Vickery, 99 F.R.D. 138, 142 (S.D.N.Y. 1983) (same); GT Plus, Ltd. v. Ja-Ru, Inc., 41 F. Supp. 2d 421, 424 (S.D.N.Y. 1998) (amendment to complaint adding claims raised in second-filed suit relates back to original complaint and original filing date applies to first-to-file rule). The first-to-file rule therefore supports, not defeats, AutoZone's Motion for Stay.

6. This Case Should be Stayed Pending Resolution of the IBM Case.

SCO has admitted in the IBM litigation that the issues involved in the present case are also at issue in IBM. See SCO v. IBM, SCO's Mem. in Supp. of Mot. to Dismiss or to Stay Count Ten of Pl. IBM's Second Countercl. Against SCO (attached hereto as Ex. H) p. 4 (the IBM "case also will determine the enforceability of SCO's claims of infringement arising from the use of Linux, including the enforceability of SCO's copyrights."). SCO has further conceded in the IBM litigation that "AutoZone will be litigating the same issues that IBM seeks to inject in this case through Count Ten." Id. at 5. SCO then concludes that "two federal courts should not simultaneously be determining whether the same copyrights are infringed." Id. On this point, AutoZone is in total agreement with SCO.

Where AutoZone and SCO disagree is whether the IBM case or the present case should move forward first. SCO's only argument as to why this case should move forward before IBM is based on the first-to-file rule. As set forth above, SCO's reliance upon the first-to-file rule is misplaced. Because the first-to-file rule actually supports the IBM case moving forward first, this case should be stayed pending IBM under SCO's own logic.

Ironically, SCO has specifically agreed with the position AutoZone advocates in this motion in statements that SCO has made to the court in the Red Hat case. In that case, SCO has aggressively argued that Red Hat should be stayed pending resolution of the IBM case:

  • "The previously filed SCO v. IBM Case addresses most, if not all, of the issues of copyright infringement and misappropriation. If these issues are decided against SCO in that case, then Red Hat's lawsuit becomes unnecessary." Red Hat v. SCO, SCO's Opening Br. in Supp. of its Mot. to Dismiss (attached to AutoZone Motion to Stay as Ex. N) p. 15.
  • "The infringement and misappropriation issues Red Hat seeks to adjudicate in this case are currently before U.S. District Judge Dale A. Kimball in the SCO v. IBM Case pending in Utah Federal District Court." Red Hat v. SCO, SCO's Opening Br. in Supp. of its Mot. to Dismiss at 2.
  • [This] Court correctly observed that the IBM case will address a central issue in this 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. Red Hat v. SCO, SCO's Opp. to Recons. at 3.

AutoZone submits that SCO should be bound by its judicial admissions, and this Court should stay the present case pending resolution of the relevant issues in IBM. See Am. Title Ins. Co. v. Lacelaw Corp., 861 F.2d 224, 227 (9th Cir. 1988).

A stay of the present case pending the IBM case is also warranted given the respective stages of the actions. It is well-established that an action that has advanced significantly further should proceed before an action that is in the very early stages of litigation. See, e.g., Coop. Centrale Raiffeisen-Boerenleen Bank B.A. v. Northwestern Nat'l Ins. Co., 778 F. Supp. 1274, 1279 (S.D.N.Y. 1991) (denying stay in favor of second action because "the parties [in the present case] have conducted substantial discovery, and they have briefed and argued a motion for summary judgment" whereas the defendant in the second action "had not even filed its answer"); Ward v. Follett Corp., 158 F.R.D. 645, 649 (N.D. Cal. 1994) (dismissing case because, in part, "discovery is already underway" in related action); Marianna Imports, Inc. v. Helene Curtis, Inc., 873 F. Supp. 308, 309 (D.Neb. 1994) (dismissing case because "[t]he action in Illinois is further developed than this case as discovery there has already commenced"); Optical Recording Corp. v. Capitol-EMI Music, Inc., 803 F. Supp. 971, 974 (D. Del. 1992) (denying motion to dismiss or stay because "this action has proceeded further than the New York lawsuit").

Although this case has only recently been filed, relevant discovery in the IBM case is nearly complete. IBM recently reported to the court that the parties "have essentially completed their document productions, depositions have commenced, and IBM has moved for summary judgment ... ." IBM v. SCO, IBM's Mem. In Opp. To SCO's Mot. To Dismiss or Stay Count Ten of IBM's Second Am. Countercl. (attached hereto as Ex. I) p. 3. Because the IBM case is nearly complete on issues that SCO concedes are largely the same and that are key threshold issues to relevant issues in this case, and because the relevant claims in IBM have now been tendered to the court for resolution on the merits, AutoZone submits that considerations of judicial economy strongly support the stay of this case pending the District of Utah's resolution of the IBM case.

7. This Case Should Be Stayed Pending Resolution of the Red Hat Case Because The Law Favors Declaratory Judgment Actions By a Product Manufacturer or Distributor Over Infringement Actions Against Customers or End Users.

Federal Courts have long recognized in the analogous context of patent infringement litigation that a declaratory judgment action by a product manufacturer or distributor against a patent owner should proceed before infringement actions by the patent owner against the manufacturer's customers or end users. See, e.g., Ricoh C. v. Aeroflex Inc., 279 F. Supp. 2d 554, 557 (D. Del. 2003) ("A manufacturer's declaratory judgment suit should be given preference over a patentee's suit against the manufacturer's customers when those customers are being sued for their ordinary use of the manufacturer's products"); see also Katz v. Lear Siegler, Inc., 909 F.2d 1459, 1464 (Fed. Cir. 1990) ("[L]itigation against or brought by the manufacturer of infringing good takes precedence over a suit by the patent owner against customers of the manufacturer."); Codex Corp. v. Milgo Elecs. Corp., 553 F.2d 735, 737-38 (1st Cir. 1977); Whelen Techs., Inc. v. Mill Specialties, Inc., 741 F. Supp. 715, 715 (D. Ill. 1990) ("In patent infringement actions, stays are appropriate where the first action is brought against the customer of an offending manufacturer and a subsequent action is brought involving the manufacturer itself.").

This rule "acknowledges that a patentee's election to sue customers, rather than a manufacturer itself, is often based on a desire to intimidate smaller businesses." Ricoh, 279 F. Supp. 2d at 557.

The rule set forth in these patent cases applies with equal force in the present case. This case involves an infringement action brought by the copyright holder (SCO) against the product customer or end user (AutoZone) merely on the basis of the customer's or end user's normal use of the manufacturer's or distributor's (Red Hat's) product. The Red Hat case is a declaratory judgment action by the "manufacturer" and distributor of Red Hat Linux (Red Hat) against the purported copyright holder (SCO). AutoZone therefore submits that this case should be stayed while Red Hat's claims against SCO proceed to resolution. Ricoh, F. Supp. 2d at 557; Katz, 909 F.2d at 1464; Whelen Techs., 741 F. Supp. at 715.

B. In the Alternative, the Court Should Direct SCO to Amend its Complaint to Provide AutoZone with a More Definitive Statement of SCO's Claims.

As set forth in AutoZone's opening brief, SCO's Complaint fails to comply with Rule 8 because it does not give AutoZone "fair notice" of SCO's copyright infringement claim and the grounds upon which the claim rests. Underwood v. Archer Mgmt. Servs., Inc., 857 F. Supp. 96, 97 (D.D.C. 1994) (quoting Conley v. Gibson, 355 U.S. 41, 48 (1957)). In support of its position, AutoZone cited to specific ways in which the Complaint fails to give AutoZone proper notice of the nature and basis of SCO's claims. Rather than address any of these issues, SCO responds to AutoZone's motion merely by alleging broadly that its complaint meets Rule 8's pleading requirements. SCO Brief at pp. 19-20.

SCO implicitly acknowledges the vague nature of its Complaint by its failure to address the mystery surrounding its listing of thirty reference manuals, programmer's guides, and other written documentation relating to UNIX within its copyright registrations. Compl. 15. As stated in AutoZone's initial brief, SCO lists these materials and never mentions the materials again in the Complaint. AutoZone is entitled to know whether SCO is alleging that AutoZone has infringed the copyrights in these materials, and, if so, how.

SCO similarly fails to address how the problem associated with shared libraries identified by AutoZone in its Motion to Stay is solved or otherwise addressed in the Complaint. Again, SCO has implicitly acknowledged that its broad references to the functionality of UNIX's shared libraries does nothing to reasonably apprise AutoZone of the copyrights SCO claims to own in UNIX.

SCO's minimal response in its brief indicates that SCO is intentionally trying to avoid identifying the nature and basis of its purported claims. As AutoZone previously noted, the Linux code is freely available to anyone to examine, and SCO has been in possession of the code for years. SCO can readily identify the lines, files, or organization of Linux code that it claims infringes UNIX, and SCO can likewise readily identify the corresponding lines, files, or organization of UNIX that SCO claims to be infringed. As the Complaint currently stands, Rule 8 requires SCO to do so. Without such information, AutoZone cannot determine the applicability of specific affirmative defenses and whether any of SCO's claims are subject to dismissal or judgment under Rules 12 or 56 and is left to guess which of the millions of lines of Linux source code, or worse yet, which organizational elements within those millions of lines of code, are the subject of SCO's claims.

SCO claims that the information AutoZone seeks in its Motion for More Definite Statement is properly the subject of discovery, and that AutoZone's motion should thus be denied. SCO Brief at pp. 19-20. The IBM case demonstrates, however, that AutoZone will not get this information from SCO in discovery. IBM has been requesting from the outset of that case that SCO identify the UNIX code that is allegedly copied or otherwise misappropriated in Linux. SCO insists that, following two orders compelling it to provide the information, it has fully complied and produced all evidence in its possession, custody or control responsive to IBM's requests. IBM has recently filed a motion for summary judgment on its Tenth Counterclaim because what SCO has produced does not evidence any infringement of UNIX by Linux. See IBM Mot. for Partial Summ. J. at 2. SCO's contention that AutoZone will get the information in discovery that it now seeks thus appears wholly illusory. Accordingly, SCO should be directed to amend its Complaint and provide a more definite statement of its claims.

CONCLUSION

For the foregoing reasons and the reasons set forth in its opening brief, AutoZone respectfully requests that the Court stay this action pending resolution of the IBM, Novell, and Red Hat cases. In the alternative, SCO requests that the Court direct SCO to provide a more definite statement of its claims so that AutoZone can frame a proper responsive pleading.

This 4th day of June, 2004.

[signature]
James J. Pisanelli, Esq.
Nicki L. Wilmer, Esq.
SCHRECK BRIGNONE
[address]
[phone]

Attorneys for Defendant
AutoZone, Inc.


  1. SCO's CEO has stated that SCO is not trying to "blow up Linux" but "to get a transaction fee every time [Linux] is sold." See Interview of SCO CEO Darl McBride with CRN.COM dated Nov. 18, 2003 (attached hereto as Ex. E.) Therefore, it is clear that what SCO is truly interested in is not that AutoZone cease use of Linux, but that AutoZone (and other end users) pay SCO a license fee.

  2. Other than making self-serving statements that Novell's claims to ownership of UNIX are unfounded, SCO's only argument as to why the present case should not be stayed in favor of Novell is that the Novell case could settle or be resolved on different grounds. Having disposed of this argument, AutoZone submits that the present case is properly stayed pending resolution of Novell.

  3. The fact that the Red Hat case is currently stayed does not change the analysis. That case is stayed, and not dismissed, pending the IBM case. Moreover, it is possible that the court will lift the stay in response to Red Hat's pending motion for reconsideration.


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