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The GPL Pickle SCO Is In -- IBM's Memo in Support of PSJ on Counterclaim for Copyright Infringement - as text
Saturday, August 21 2004 @ 10:53 PM EDT

Here is IBM's Redacted Memorandum in Support of IBM's Motion for Partial Summary Judgment on its Counterclaim for Copyright Infringement (8th Counterclaim) as text.

The first thing that stands out is that we learn in paragraph 66 that IBM was among those companies that got a letter from the first batch SCO sent out in May of 2003, the one sent to the Fortune 1000 companies. The same paragraph mentions something we've been too busy to write about, but it definitely belongs in our archives, that SCO on August 10 threatened to increase the cost of its SCOSource license, "which it says companies running Linux need to buy in order to avoid being sued":

"Two types of IP licenses are currently available from SCOsource: 'paid up' licenses that give permanent indemnity, and annual licenses, which vary between one-fifth and two-fifths of the cost of a full version.

"SCO may decide not to offer both options in the future and could, for example, decide to insist on an annual payment that would be more lucrative in the long term."

The other thing I noticed is that IBM isn't asking at this time for damages. They are carefully carving out just the liability question, which is something you can do in a summary judgment motion. There is a difference between a motion to dismiss and a summary judgment. The name alone tells you what that difference is. In a summary judgment motion, the relief you are asking for is also that you want it dropped from the case, whatever the subject matter of the motion is, but you want it to go away with a ruling, or judgment, that you are not liable or, as in this case, that the other guy is.

Because of that distinction, the judge can respond in several ways, whereas in a motion to dismiss it's yes or no only, pretty much.

Here, in a summary judgment motion, you are essentially carving out what you think you can win on the law alone, without needing any facts brought to a jury. The only way to defeat such a motion is to bring forward facts sufficient to show that there are matters that are in dispute that need to be brought to a jury and that there is at least some set of facts that would make it at least conceivable that you could prevail. IBM cites In Re Grandote Country Club:

"Summary judgment is appropriate 'if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.' Fed. R. Civ. P. 56(c). In reviewing a summary judgment motion, the court is to view the record 'in the light most favorable to the nonmoving party.' Thournir v. Meyer ,909 F.2d 408 , 409 (10th Cir. 1990) (citation omitted). The purpose of a summary judgment motion, unlike that of a motion to dismiss, is to determine whether there is evidence to support a party's factual claims. Unsupported conclusory allegations thus do not create a genuine issue of fact. See United States v. Simons,129 F.3d 1386 , 138889 (10th Cir. 1997) (citing Allen v. Muskogee, Okla.,119 F.3d 837 , 84344 (10th Cir. 1997)). To withstand summary judgment, the nonmoving party 'must come forward with "specific facts showing that there is a genuine issue for trial."' Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting Fed. R. Civ. P. 56(e ))."

A similar explanation of the standard for summary judgments is found in a case not cited here, but which I found to help you understand summary judgments, Sun v. Microsoft:

"Summary judgment is proper if the record indicates there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. Proc. 56(c). A genuine issue of material fact exists only when 'the evidence is such that a reasonable jury could return a verdict for the nonmoving.' Anderson v. Liberty Lobby Inc., 106 S. Ct. 2505, 2510 (1986). Rule 56(c) mandates the entry of summary judgment against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's cases, and on which that party will bear the burden of proof at trial. Celotex Corp. V. Catrett, 106 S. Ct. 2548, 2552-53 (1986). . . . "

Mere allegations are not enough to defeat a summary judgment motion. There must be facts and evidence presented. And minor issues or disputes won't do the job either. Any dispute must be material to the case to defeat a SJ motion. From the Sun case:

"[T]he nonmoving party 'may not rest upon the mere allegations or denials of the adverse party's pleadings . . .[T]he adverse party's response . . . must set forth specific facts showing that there is a genuine issue for trial.' Fed.R.Civ.Proc. 56(e). The nonmoving party 'must do more than simply show that there is some metaphysical doubt as to the material facts.' Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 106 S.Ct. 1348, 1356 (1986). 'Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no "genuine issue for trial."' Id. ; Anderson, 106 S.Ct. at 2512 ('There mere existence of a scintilla of evidence . . . will be insufficient.'). However, on summary judgment, the court must draw all justifiable inferences in favor of the nonmoving party. Masson v. New Yorker Magazine, Inc., 111 S.Ct. 2419, 2434-35 (1991)."

That Sun v. MS case shows that the judge has a variety of ways to rule. In that one, the judge asked for oral argument to address certain questions that needed clarification. By this motion, IBM is forcing the issue. To establish copyright infringement, a plaintiff must prove (1) ownership of a valid copyright and (2) copying of expression protected by its copyright. IBM appears to have succeeded in doing so. If SCO fails to answer effectively, think of the consequences of having a ruling that their repudiation of the GPL includes the LGPL, as IBM here asserts, and that they can't use any GPL or LGPL code, should IBM be granted its permanent injunction relief. While SCO may not wish to distribute any Linux distros any more, they surely wish to distribute GPL applications that run on top of it. Their latest Unix offering was distinguished mainly by the Open Source components in it.

Should IBM prevail on this one point, while the ruling would affect only IBM code directly, I can see every FOSS developer on earth with a registered copyright immediately filing suit to block SCO's use of their FOSS works, and frankly SCO's legal team would likely tell them to pull all GPL and LGPL code out of everything they offer as soon as IBM wins this, because there would be no reasonable likelihood of surviving such challenges. Think of what that would mean for their business. Think too of all the FUD we wouldn't have to read any more about the GPL.

Of course, in the alternative, SCO might think it can throw in the towel on their argument that the GPL is void/unenforceable etc. and say that they had the right to distribute IBM's copyrighted works because they had a GPL license. But if they do that, then they face a challenge from a different angle. Actually, two, as we will see. First, as IBM goes on to say, they are violating the terms of the GPL by attempting to collect royalties or licensing fees for using Linux. Poof. There goes SCOSource.

See, if only SCO had paid attention to my summer school "course" in the GPL last summer, they could have spared themselves this moment. I even sent them an email last July raising questions about the license violating the GPL, an email that I was told would receive a reply, although I never did actually get one. But they now instead face the music, based on the list of exhibits IBM offers in paragraph 66 of all the times they said the license was for running Linux. Just stupid. There is no other word.

On the other hand, one of my favorite aspects of the GPL is so many business types fail to take it seriously enough to really study it, and they get caught with their pants down every time. That is the real reason there has never before been a serious court challenge involving the GPL. When Eben Moglen is in negotiations with offenders, and they wake up to what the GPL really means for them, they quickly pull up their pants and get in compliance. SCO at the moment is precisely in that position, caught with their pants down and for them it's now too late to pull up their pants and get in compliance. No matter what they do now, they are in GPL trouble. The beauty of the GPL is there is no escape. Once you violate the terms, your rights terminate, as IBM's memorandum points out:

"As detailed above ( 66), SCO is attempting to collect, and has collected, licensing fees from Linux users, in violation of any permission or license it may have had under the GPL and LGPL. Because SCO has attempted to license Linux in violation of the GPL and LGPL, any permission or license it may have had under the GPL and LGPL (to copy the IBM Copyrighted Works) terminated. The GPL and LGPL expressly provide that any attempt othewise than in accord with the GPL's or LGPL's restrictions to sublicense works subject to the GPL or LGPL 'is void, and will automatically terminate your rights under this License'. ( 63.)10 SCO's efforts (under whatever guise) to collect licensing fees for GPL- or LGPL-licensed activities run afoul of the GPL and LGPL.

"By its breaches of the GPL and LGPL, SCO has forfeited any protection against claims of copyright infringement that it may have enjoyed by virtue of the GPL or LGPL. SCO cannot violate the covenants that led to and underlie Linux without forfeiting the beneflts those covenants confer. Because SCO has continued to distribute and copy Linux products containing verbatim copies of IBM's Copyrighted Works after it disclaimed, renounced and breached the GPL and LGPL, SCO has infringed IBM's copyrights in those works, 17 U.S.C. 501(a), and the GPL and LGPL afford SCO no protection against IBM's claim of infringement."

And terminate means terminate, so SCO can't now hide under the GPL. The only way a GPL-violator can get back a GPL license after a termination is by express permission of the copyright holder, in this case, IBM. Hmm. Snowballs come to mind.

And the copyright infringement issues IBM raises here, you will no doubt have noticed, include JFS. Imagine for a moment the impact on this case of a ruling that SCO has infringed IBM's copyright on JFS. If you were on a jury, and you listened to SCO talk about their alleged right to control all derivative code, including JFS, and you knew they had been found guilty of infringement of IBM's copyright on JFS, do you think it might influence your feelings about how expansively SCO is trying to interpret that contract? That's not even starting to talk about damages, an issue not part of this motion, but one that is going to be addressed at some point. It doesn't help SCO even if it could win on a point or two and be awarded say $1 million if IBM is awarded $6 million in damages in return on its counterclaims. All those analysts who talk about how much SCO could win in court never seem to notice that important detail. It's also why IBM need not be interested in any settlement, if their analysis is that they can win more than they could lose in the end in any worst-case scenario.

This document is also valuable because it clearly lays out exactly how to prove copyright infringement. Note particularly footnote 6, which deals with whether posting on a website constitutes copying and distribution.

IBM relies on several cases. One of them, Gates Rubber v. Bando we've discussed on Groklaw before and you can find it here. Our thanks go to tgf and Thomas Frayne for this work. If you want a template for HTML that Geeklog and Groklaw likes, this document would be a good model.

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

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
REDACTED MEMORANDUM IN SUPPORT OF IBM'S MOTION FOR PARTIAL SUMMARY JUDGMENT ON ITS COUNTERCLAIM FOR COPYRIGHT INFRINGEMENT (EIGHTH COUNTERCLAIM)

(ORAL ARGUMENT REQUESTED)


Civil No. 2:03CV-0294 DAK

Honorable Dale A. Kimball

Magistrate Judge Brooke C. Wells

TABLE OF CONTENTS
Page
Preliminary Statement 1
Statement Of Undisputed Facts 2
A. Linux 2
B. IBM'S Contributions to Linux 3
C. SCO's Copying of the IBM Copyrighted Works 5
1. Enterprise Volume Management System 6
2. Enterprise Class Event Logging 6
3. Dynamic Probes 7
4. Linux Support Power PC64 7
5. Omni Print Driver 8
6. Journaled File System 8
7. Next Generation Posix Threading 8
8. Linux Kernel Support for JFS 9
9. Linux Kernel S390 Support 9
10. Linux Kernel Support for Service Processor 10
11. Linux Kernel Support for Memory Expansion Technology 10
12. Linux Kernel Support for IBM eServer iSeries Devices 10
13. Linux Kernel Support for PCI Hotplug 11
14. Linux Kernel Support for pSeries Hypervisor Terminal 11
15. Linux Kernel PPC64 Support 12
16. Linux Kernel Support for Mwave Modem 12
D. The GPL 12
Summary Judgment Standard 16
Argument 16
SCO HAS INFRINGED IBM'S COPYRIGHTS 16
A. IBM Owns the Copyrights to the IBM Copyrighted Works. 17
B. SCO Has Copied and Distributed the IBM Copyrighted Works. 17
C. SCO Lacks Permission or a License to Copy or Distribute the IBM Copyrighted Works. 21
Conclusion 23

TABLE OF AUTHORITIES

CASES

Autoskill, Inc. v. Nat'l Educ. Support Sys., Inc.,
994 F.2d 1476 (10th Cir. 1993)
17, 18
Celotex Corp, v. Catrett,
477 U.S. 317 (1986)
16
Computer Assocs. Int'l, Inc. v. Altai, Inc.,
982 F.2d 693 (2d Cir. 1992)
18
Country Kids 'N City Slicks, Inc. v. Sheen,
77 F.3d 1280 (10th Cir. 1996)
18
Eve of Milady v. Impression Bridal, Inc.,
957 F. Supp. 484 (S.D.N.Y. 1997)
18
Ferguson v. Nat'l Broad Co.,
584 F.2d 111 (5th Cir. 1978)
18, 19
Gates Rubber Co. v. Bando Chem. Indus., Ltd.,
9 F.3d 823 (10th Cir. 1993)
17, 18, 19
In re Grandote Country Club Co.,
252 F.3d 1146 (10th Cir. 2001)
16
Hotaling v. Church of Jesus Christ of Latter-Day Saints,
118 F.3d 199 (4th Cir. 1997)
19, 20
Intellectual Reserve. Inc. v. Utah Lighthouse Ministry. Inc.,
75 F. Supp. 2d 1290 (D. Utah 1999)
17
MAI Sys. Corp. v. Peak Computer, Inc.,
991 F.2d 511 (9th Cir. 1993)
20
Marobie-FL, Inc. v. Nat'l Assoc. of Fire Equip. Distribs.,
983 F. Supp. 1167 (N.D. Ill. 1997)
19
Microsoft Corp. v. Computer Serv. & Repair, Inc.,
312 F. Supp. 2d 779 (E.D.N.C. 2004)
20
Mitel, Inc. v. Iqtel, Inc.,
124 F.3d 1366 (10th Cir. 1997)
18
Perry v. Sonic Graphic Systems, Inc.,
94 F. Supp. 2d 616(E.D. Pa. 2000)
19
Playboy Enters. v. Webbworld, Inc.,
968 F. Supp. 1171, 1174-75 (N.D. Tex. 1997)
19
Wilcom Pty. Ltd. v. Endless Visions,
128 F. Supp. 2d 1027 (E.D. Mich. 1998)
18, 20-21
STATUTES
17 U.S.C. 101 16
17 U.S.C. 102 16
17 U.S.C. 106 16
17 U.S.C. 410(c) 17
17 U.S.C. 501 17, 20, 23
Fed. R. Civ. P. 56(c) 16
MISCELLANEOUS
Raymond T. Nimmer, Law of Computer Technology 1:3 16
Dennis M. Kennedy, A Primer on Open Source Licensing Legal Issues: Copyright,
Copyleft, and Copyfuture, 20 St. Louis U. Pub. L. Rev. 345, 360 (2001)
22
Jason B. Wacha, Open Source, Free Software and the General Public License, 20 No. 3
Computer & Internet Law 20, 22 (2003)
22

Defendant/Counterclaim-Plaintiff International Business Machines Corporation ("IBM") respectfully submits this memorandum in support of its motion for partial summary judgment with respect to liability and a permanent injunction on its counterclaim for copyright infringement against Plaintiff/Counterclaim-Defendant The SCO Group, Inc.'s ("SCO") (Eighth Counterclaim).

Preliminary Statement

Linux is a computer operating system that has been (and is being) developed collaboratively by thousands of developers over the Internet. Like many others, IBM has contributed source code to the development of Linux and owns valid copyrights in its contributions.

SCO has, without permission, copied code from sixteen discrete packages of copyrighted source code wrltten by IBM for Linux and distributed those copies as part of its own Linux products. SCO has literally copied more than 783,OOO lines of code from these sixteen packages of IBM's copyrighted material. As a result of SCO's copying and distribution of IBM's code, SCO has unlawfully exercised IBM's rights to its works and therefore infringed IBM's copyrights.

Although IBM's contributions to Linux are copyrighted, they are permitted to be copied, modified and distributed by others under the terms of the GNU General Public License ("GPL") or the GNU Lesser General Public License ("LGPL") (collectively, the "GPL"). However, SCO has renounced, disclaimed and breached the GPL and therefore the GPL does not give SCO permission or a license to copy and distribute IBM's copyrighted works.

As is discussed below, there are no genuine issues of material fact as to SCO's liability. Accordingly, IBM is entitled to partial summary judgment and a permanent injunction on its copyright infringement counterclaim against SCO.

Statement Of Undisputed Facts 1

A. Linux.

1. The development of Linux began when an undergraduate student at the University of Helsinki, Linus Torvalds, set out to create a new, free operating system. (Ex. 1 (SCO Linux Introduction Version 1.2) at 1-5.) In 1991, Torvalds began developing the Linux "kernel", the core of the operating system, and posting news of his project to Internet newsgroups, along with a call for volunteers to assist in his efforts. (Id.)

2. With the Internet providing for a distributed collaboration, other programmers joined to write the code making up the kernel. (Ex. 1 at 1-5.) Torvalds directed the collaboration to a version 1.O release of the Linux kernel in 1994. (Id.)

3. In the years that followed, thousands of developers, including developers at SCO and IBM, contnbuted to the further development of Linux. (See Ex. 2 (Ans. to Second Am. Countercls.) 45; Ex. 3 (SCO website pages identifying SCO's contributions to Linux); Ex. 4 (SCO's Fiscal Year 2000 1O-K/A) at 15, 22, 26; Bennett Decl. 7.)

4. A number of companies distribute Linux. (Ex. 4 at 5-8, 26.) These distributors offer a variety of commercial Linux products, which typically comprise the Linux kernel, the applications that the kernel runs (which, with the kernel, comprise a complete operating system) and whatever else the distributor chooses to combine into an easily installable product. (See Id. at 5-8.)

5. SCO was founded in 1994 under the name Caldera, Inc., as a commercial distributor of Linux products. (Ex. 4 at 29-31.) Over the years, SCO has developed and marketed a number of software products containing Linux code, including Caldera Network Desktop, OpenLinux and SCO Linux. (Ex. 4 at 30-31; Ex. 24 (30(b)(6) Deposition of Erik W. Hughes ("Hughes Dep.") at 13:17-17:18, 34:12-36:17.)

B. IBM'S Contributions to Linux.

6. IBM has made substantial contributions of computer code to Linux, including, in particular, to the Linux kernel. (Bennett Decl. 6-7; Ex. 2 20, 108.)

7. Like other contrlbutors to Linux, IBM holds copyrights, including registered copyrights, on many of its contributions to Linux. (Bennett Decl. 5.)

8. Among IBM's copyrighted contributions to Linux is computer code for which IBM has registered copyrights under the following names and registration numbers on the following dates (collectively, the "IBM Copyrighted Works"):

1. Enterprise Volume Management System TX 5-757-696 August 15, 2003
2. Enterprise Class Event Logging TX 5-757-697 August 15, 2003
3. Dynamic Probes TX 5-757-698 August 15, 2003
4. Linux Support Power PC64 TX 5-757-699 August 15, 2003
5. Omni Print Driver TX 5-757-700 August 15, 2003
6. Journaled File System TX 5-757-701 August 15, 2003
7. Next Generation Posix Threading TX 5-757-702 August 15, 2003
8. Linux Kernel Support for JFS TX 5-856-466 February 2, 2004
9. Linux Kernel S390 Support TX 5-856-467 February 2, 2004
10. Linux Kernel Support for Service Processor TX 5-856-468 February 2, 2004
11. Linux Kernel Support for Memory Expansion Technology TX 5-856-469 February 2, 2004
12. Linux Kernel Support for IBM eServer iSeries Devices TX 5-856-470 February 2, 2004
13. Linux Kernel Support for PCI Hotplug TX 5-856-471 February 2, 2004
14. Linux Kernel Support for pSeries Hypervisor Terminal TX 5-856-472 February 2, 2004
15. Linux Kernel PPC64 Support TX 5-856-473 February 2, 2004
16. Linux Kernel Support for Mwave Modem TX 5-856-474 February 2, 2004
(Exs. 5-20.) The registration of each of these IBM Copyrighted Works was made within five years of the first publication of the relevant work. (Bennett Decl. 5.)

9. IBM's "Enterprise Volume Management System" work (a copy of which is at Exhibit 5.1) is comprised of 328 files, containing 298,943 lines of code.

10. IBM's "Enterprise Class Event Logging" work (relevant portions of which are at Exhibit 6.1) includes 7 files, containing 2,048 lines of code.

11. IBM's "Dynamic Probes" work (relevant portions of which are at Exhibit 7.1) includes 8 files, containing 2,411 lines of code.

12. IBM's "Linux Support Power PC64" work (a copy of which is at Exhibit 8.1) is comprised of 55 files, containing 19,042 lines of code.

13. IBM's "Omni Print Driver" work (a copy of which is at Exhibit 9.1) includes 1,202 files, containing 366,407 lines of code.

14. IBM's "Journaled File System" work (a copy of which is at Exhibit 10.1) is comprised of 39 files, containing 9,914 lines of code.

15. IBM's "Next Generation Posix Threading" work (a copy of which is at Exhibit 11.1) is comprised of 5 files, containing 1,851 lines of code.

16. IBM's "Linux Kernel Support for JFS" work (a copy of which is at Exhibit 12.1) is comprised of 2 files, containing 4,302 lines of code.

17. IBM's "Linux Kernel S390 Support" work (a copy of which is at Exhibit 13.1) is comprised of 72 files, containing 57,670 lines of code.

18. IBM's "Linux Kernel Support for Service Processor" work (a copy of which is at Exhibit 14.1) is comprised of 5 files, containing 2,554 lines of code.

19. IBM's "Linux Kernel Support for Memory Expansion Technology" work (a copy of which is at Exhibit 15.1) is comprised of 1 file, containing 2,277 lines of code.

20. IBM's "Linux Kernel Support for IBM eServer iSeries Devices" work (a copy of which is at Exhibit 16.1) is comprised of 2 files, containing 7,455 lines of code.

21. IBM's "Linux Kernel Support for PCI Hotplug" work (a copy of which is at Exhibit 17.1) is comprised of 1 file, containing 1,122 lines of code.

22. IBM's "Linux Kernel Support for pSeries Hypervisor Terminal" work (a copy of which is at Exhibit 18.1) is comprised of 1 file, containing 364 lines of code.

23. IBM's "Linux Kernel PPC64 Support" work (a copy of which is at Exhibit 19.1) is comprised of 8 files, containing 4,412 lines of code.

24. IBM's "Linux Kernel Support for Mwave Modem" work (a copy of which is at Exhibit 20.1) is comprised of 4 files, containing 2,523 lines of code.

25. IBM made the IBM Copyrighted Works publicly available by posting them on the Internet as part of the Linux development process. (Bennett Decl. 7.) SCO also had access to the IBM Copyrighted Works in its capacity as a partner in UnitedLinux. (Id. 8.)

C. SCO's Copying of the IBM Copyrighted Works.

26.

REDACTED

27. In addition, SCO made available to the public on its Internet website certain Linux code, including the code identified in the following sixteen subsections. (Ex. 23 (30(b)(6) Deposition of Christopher Sontag ("Sontag Dep.")) at 220:20-224:19; Bennett Decl. 10-13.) SCO continue to make that code available for download on its Internet website at least until August 4, 2004. (Bennett Decl. 10-13.)

28. As illustrated in detail in the following paragraphs, SCO's Linux products and the Linux code that SCO made available on its Internet website include code identical to code in the IBM Copyrighted Works, including their accompanying IBM copyright notices. (Exs. 5.1-20.3; Bennett Decl. 9-11.) SCO's Linux products and the Linux code it made available on its Internet website include over 783,000 lines of code identical to code in the IBM Copyrighted Works (Id.)

1. Enterprise Volume Management System.

29. SCO has literally copied and distributed IBM's copyrighted "Enterprise Volume Management System" source code, both in the SCO Linux Server 4.0 software product that it sold to customers and in the Linux files that SCO made available for download on its Internet website.

30. Specifically, 298,943 lines of IBM's source code, including IBM copyright notices, appear verbatim and are identical to code in SCO's products, as indicated in the table attached as Addendum A. A copy of the relevant Linux files from SCO Linux Server 4.0 is attached as Exhibit 5.2 to the Sorenson Declaration. A copy of the relevant Linux files available on SCO's Internet website is attached as Exhibit 5.3 to the Sorenson Declaration.

2. Enterprise Class Event Logging.

31. SCO has literally copied and distributed IBM's copyrighted "Enterprise Class Event Logging" source code, both in the SCO Linux Server 4.0 software product that it sold to customers and in the Linux files that SCO made available for download on its Internet website.

32. Specifically, 2,048 lines of IBM's source code, including IBM copyright notices, appear verbatim and are identical to code in SCO's products, as indicated in the table attached as Addendum B. A copy of the relevant Linux files from SCO Linux Server 4.0 is attached as Exhibit 6.2 to the Sorenson Declaration. A copy of the relevant Linux files available on SCO's Internet website is attached as Exhibit 6.3 to the Sorenson Declaration.

3. Dynamic Probes.

33. SCO has literally copied and distributed IBM's copyrighted "Dynamic Probes" source code, both in the SCO Linux Server 4.0 software product that it sold to customers and in the Linux files that SCO made available for download on its Internet website.

34. Specifically, 2,411 lines of IBM's source code, including IBM copyright notices, appear verbatim and are identical to code in SCO's products, as indicated in the table attached as Addendum C. A copy of the relevant Linux files from SCO Linux Server 4.0 is attached as Exhibit 7.2 to the Sorenson Declaration. A copy of the relevant Linux files available on SCO's Internet website is attached as Exhibit 7.3 to the Sorenson Declaration.

4. Linux Support Power PC64.

35. SCO has literally copied and distributed IBM's copyrighted "Linux Support Power PC64" source code, both in the SCO Linux Server 4.0 software product that it sold to customers and in the Linux files that SCO made available for download on its Internet website.

36. Specifically, 19,042 lines of IBM's source code, including IBM copyright notices, appear verbatim and are identical to code in SCO's products, as indicated in the table attached as Addendum D. A copy of the relevant Linux files from SCO Linux Server 4.0 is attached as Exhibit 8.2 to the Sorenson Declaration. A copy of the relevant Linux files available on SCO's Internet website is attached as Exhibit 8.3 to the Sorenson Declaration.

5. Omni Print Driver.

37. SCO has literally copied and distributed IBM's copyrighted "Omni Print Driver" source code, both in its Open Linux 3.1.1 Asia product and in the Linux files that SCO made available for download on its Internet website.

38. Specifically, 366,407 lines of IBM's source code, including IBM copyright notices, appear verbatim and are identical to code in SCO's products, as indicated in the table attached as Addendum E. A copy of the relevant Linux files from Open Linux 3.1.1 Asia is attached as Exhibit 9.2 to the Sorenson Declaration. A copy of the relevant Linux files available on SCO's Internet website is attached as Exhibit 9.3 to the Sorenson Declaration.

6. Journaled File System.

39. SCO has literally copied and distributed IBM's copyrighted "Journaled File System" source code, both in the SCO Linux Server 4.0 software product that it sold to customers and in the Linux files that SCO made available for download on its Internet website.

40. Specifically, 9,914 lines of IBM's source code, including IBM copyright notices, appear verbatim and are identical to code in SCO's products, as indicated in the table attached as Addendum F. A copy of the relevant Linux files from SCO Linux Server 4.0 is attached as Exhibit 10.2 to the Sorenson Declaration. A copy of the relevant Linux files available on SCO's Internet website is attached as Exhibit 10.3 to the Sorenson Declaration.

7. Next Generation Posix Threading.

41. SCO has literally copied and distributed IBM's copyrighted "Next Generation Posix Threading" source code, both in the SCO Linux Server 4.0 software product that it sold to customers and in the Linux files that SCO made available for download on its Internet website.

42. Specifically, 1,851 lines of IBM's source code, including IBM copyright notices, appear verbatim and are identical to code in SCO's products, as indicated in the table attached as Addendum G. A copy of the relevant Linux files from SCO Linux Server 4.0 is attached as Exhibit 11.2 to the Sorenson Declaration. A copy of the relevant Linux files available on SCO's Internet website is attached as Exhibit 11.3 to the Sorenson Declaration.

8. Linux Kernel Support for JFS.

43. SCO has literally copied and distributed IBM's copyrighted "Linux Kernel Support for JFS" source code, both in the SCO Linux Server 4.0 software product that it sold to customers and in the Linux files that SCO made available for download on its Internet website.

44. Specifically, 4,302 lines of IBM's source code, including IBM copyright notices, appear verbatim and are identical to code in SCO's products, as indicated in the table attached as Addendum H. A copy of the relevant Linux files from SCO Linux Server 4.0 is attached as Exhibit 12.2 to the Sorenson Declaration. A copy of the relevant Linux files available on SCO's Internet website is attached as Exhibit 12.3 to the Sorenson Declaration.

9. Linux Kernel S390 Support.

45. SCO has literally copied and distributed IBM's copyrighted "Linux Kernel S390 Support" source code, both in the SCO Linux Server 4.0 software product that it sold to customers and in the Linux files that SCO made available for download on its Internet website.

46. Specifically, 57,670 lines of IBM's source code, including IBM copyright notices, appear verbatim and are identical to code in SCO's products, as indicated in the table attached as Addendum I. A copy of the relevant Linux files from SCO Linux Server 4.0 is attached as Exhibit 13.2 to the Sorenson Declaration. A copy of the relevant Linux files available on SCO's Internet website is attached as Exhibit 13.3 to the Sorenson Declaration.

10. Linux Kernel Support for Service Processor.

47. SCO has literally copied and distributed IBM's copyrighted "Linux Kernel Support for Service Processor" source code, both in the SCO Linux Server 4.0 software product that it sold to customers and in the Linux files that SCO made available for download on its Internet website.

48. Specifically, 2,554 lines of IBM's source code, including IBM copyright notices, appear verbatim and are identical to code in SCO's products, as indicated in the table attached as Addendum J. A copy of the relevant Linux files from SCO Linux Server 4.0 is attached as Exhibit 14.2 to the Sorenson Declaration. A copy of the relevant Linux files available on SCO's Internet website is attached as Exhibit 14.3 to the Sorenson Declaration.

11. Linux Kernel Support for Memory Expansion Technology.

49. SCO has literally copied and distributed IBM's copyrighted "Linux Kernel Support for Memory Expansion Technology" source code, both in the SCO Linux Server 4.0 software product that it sold to customers and in the Linux files that SCO made available for download on its Internet website.

50. Specifically, 2,277 lines of IBM's source code, including IBM copyright notices, appear verbatim and are identical to code in SCO's products, as indicated in the table attached as Addendum K. A copy of the relevant Linux files from SCO Linux Server 4.0 is attached as Exhibit 15.2 to the Sorenson Declaration. A copy of the relevant Linux files available on SCO's Internet website is attached as Exhibit 15.3 to the Sorenson Declaration.

12. Linux Kernel Support for IBM eServer iSeries Devices.

51. SCO has literally copied and distributed IBM's copyrighted "Linux Kernel Support for IBM eServer iSeries Devices" source code, both in the SCO Linux Server 4.0 software product that it sold to customers and in the Linux files that SCO made available for download on its Internet website.

52. Specifically, 7,455 lines of IBM's source code, including IBM copyright notices, appear verbatim and are identical to code in SCO's products, as indicated in the table attached as Addendum L. A copy of the relevant Linux files from SCO Linux Server 4.0 is attached as Exhibit 16.2 to the Sorenson Declaration. A copy of the relevant Linux files available on SCO's Internet website is attached as Exhibit 16.3 to the Sorenson Declaration.

13. Linux Kernel Support for PCI Hotplug.

53. SCO has literally copied and distributed IBM's copyrighted "Linux Kernel Support for PCI Hotplug" source code, both in the SCO Linux Server 4.0 software product that it sold to customers and in the Linux files that SCO made available for download on its Internet website.

54. Specifically, 1,122 lines of IBM's source code, including IBM copyright notices, appear verbatim and are identical to code in SCO's products, as indicated in the table attached as Addendum M. A copy of the relevant Linux files from SCO Linux Server 4.0 is attached as Exhibit 17.2 to the Sorenson Declaration. A copy of the relevant Linux files available on SCO's Internet website is attached as Exhibit 17.3 to the Sorenson Declaration.

14. Linux Kernel Support for pSeries Hypervisor Terminal.

55. SCO has literally copied and distributed IBM's copyrighted "Linux Kernel Support for pSeries Hypervisor Terminal" source code, both in the SCO Linux Server 4.0 software product that it sold to customers and in the Linux files that SCO made available for download on its Internet website.

56. Specifically, 364 lines of IBM's source code, including IBM copyright notices, appear verbatim and are identical to code in SCO's products, as indicated in the table attached as Addendum N. A copy of the relevant Linux files from SCO Linux Server 4.0 is attached as Exhibit 18.2 to the Sorenson Declaration. A copy of the relevant Linux files available on SCO's Internet website is attached as Exhibit 18.3 to the Sorenson Declaration.

15. Linux Kernel PPC64 Support.

57. SCO has literally copied and distributed IBM's copyrighted "Linux Kernel PPC64 Support" source code, both in the SCO Linux Server 4.0 software product that it sold to customers and in the Linux files that SCO made available for download on its Internet website.

58. Specifically, 4,412 lines of IBM's source code, including IBM copyright notices, appear verbatim and are identical to code in SCO's products, as indicated in the table attached as Addendum O. A copy of the relevant Linux files from SCO Linux Server 4.0 is attached as Exhibit 19.2 to the Sorenson Declaration. A copy of the relevant Linux files available on SCO's Internet website is attached as Exhibit 19.3 to the Sorenson Declaration.

16. Linux Kernel Support for Mwave Modem.

59. SCO has literally copied and distributed IBM's copyrighted "Linux Kernel Support for Mwave Modem" source code, both in the SCO Linux Server 4.0 software product that it sold to customers and in the Linux files that SCO made available for download on its Internet website.

60. Specifically, 2,523 lines of IBM's source code, including IBM copyright notices, appear verbatim and are identical to code in SCO's products, as indicated in the table attached as Addendum P. A copy of the relevant Linux files from SCO Linux Server 4.0 is attached as Exhibit 20.2 to the Sorenson Declaration. A copy of the relevant Linux files available on SCO's Internet website is attached as Exhibit 20.3 to the Sorenson Declaration.

D. The GPL.

61. Although IBM's contributions to Linux are copyrighted, they are permitted to be copied, modified and distributed by others under the terms of the GPL or LGPL. (Ex. 2 26; Ex. 24 at 66:5-13, 66:25-67:5, 75:16-20; Ex. 27 (GNU General Public License); Ex. 26 (GNU Lesser General Public License.) IBM has not authorized the copying, modification or distribution of the IBM Copyrighted Works, except pursuant to the terms of the GPL or LGPL. (Bennett Decl. 7.)

62. According to SCO, the GPL (and thus also the LGPL) "is unenforceable, void and/or voidable" (Ex. 2 at 20 (Sixth Affirmative Defense)); "violates the U.S. Constitution, together with copyright, antitrust and export control laws" (Ex. 25 (Amend. Ans. to Amend. Countercls.) at 16 (Eighth Affirmative Defense); Ex. 23 at 213:15-20); is unenforceable or inapplicable in this litigation (Ex. 2 24, 28, 155, 157); and is preempted by federal copyright law and unenforceable under state law. (Ex. 22 (SCO's Resp. to IBM's Third Set of Interrogatories) at 38-39.) SCO also claims all rights to enforce the GPL (and thus also the LGPL) are waived and all are estopped from enforcing the GPL. (Ex. 2 at 20 (Seventh Affirmative Defense); Ex. 23 at 213:14-215:7.)

63. The GPL and LGPL provide that a person may rely on the GPL or LGPL as a license or grant of permission (to copy, modify or distrlbute code covered by the GPL or LGPL) only if the person abides by the terms of the GPL or LGPL. (Ex. 27 5; Ex. 26 9) The GPL and LGPL expressly provide that any attempt otherwise to copy, modify, sublicense, or distribute the code licensed under the GPL or LGPL "is void, and will automatically terminate your rights under this License". (Ex. 27 4; Ex. 26 8.)

64. The GPL and LGPL provide, for example, that a person may not copy, modify, sublicense, or distribute code covered by the GPL or LGPL except as expressly provided under the GPL or LGPL (Ex. 27 4; Ex. 26 8), and may not impose any "further restrictions" on the recipients' exercise of the rlghts granted under the GPL or LGPL. (Ex. 27 6; Ex. 26 10.)

65. Among the "further restrictions" that the GPL and LGPL do not permit are royalties or licensing fees (Ex. 27 2, 3; Ex. 26 2, 4) (although fees can be collected for "the physical act of transferring a copy" of the code or for warranty protection). (Ex. 27 1; Ex. 26 1.) If modified works or machine-readable versions of GPL- or LGPL-licensed software are distributed, they must be licensed "at no charge to all third parties under the terms of this License." (Ex. 27 2 (emphasis added); Ex. 26 2; see also Ex. 27 3; Ex. 26 4.)

66. SCO has collected, and attempted to collect, royalties and licensing fees from Linux users in excess of the fees permitted by the GPL and LGPL to be collected for the "physical act of transferring a copy" of the code or for warranty protection (Ex. 27 1,2, and 3; Ex. 26 1, 2, and 4), and in doing so, has attempted to copy, modify, sublicense, or distribute the code licensed under the GPL or LGPL other than as "expressly provided under [the GPL or LGPL]". (Ex. 27 4; Ex. 26 8.) SCO has done so in at least the following ways:

a. In May 2003, SCO sent letters to Fortune 1000 companies (including IBM) claiming that "Linux is, in material part, an unauthorized derivative of UNIX". SCO further stated that "[w]e believe that Linux infringes on our UNIX intellectual property and other rights" and "intend to aggressively protect and enforce these rights". (Ex.28.)

b. In a May 14, 2003 press release, SCO stated that "Linux is an unauthorized derivative of UNIX and that legal liability for the use of Linux may extend to commercial users". SCO warned that non- SCO Linux customers could face liability for using Linux "software to run their business". (Ex. 29.)

c. In a July 21, 2003 press release, SCO announced that it would be offering licenses to Linux end users, who could otherwise "face liability for running [Linux] in their organizations". (Ex. 30.)

d. In an August 5, 2003 press release, SCO announced the availability of a license from SCO that "permits the use of SCO's intellectual property, in binary form only, as contained in Linux distributions". (Ex.31.)

e. REDACTED

f. REDACTED

g. REDACTED
REDACTED

h. In a December 22, 2003 press release, SCO announced that it had "commenced providing notification to selected Fortune 1000 Linux end users" that their distribution or redistribution of Linux containing code on which SCO purported to hold copyrights would constitute infringement. (Ex. 35.)

i. In connection with its December 22 press release, SCO released a template of a letter dated December 19, 2003, sent to "Linux User". In that letter, SCO wrote that "the use of the Linux operating system in a commercial setting violates our rights under the United States Copyright Act, including the Digital Millennium Copyright Act" and that "we will take appropriate actions to protect our rights". (Ex. 36.)

j. REDACTED

k. REDACTED

l. On March 3, 2004, SCO sued AutoZone, Inc., in the United States District Court for the District of Nevada, alleging that AutoZone, through its use of Linux, is infringing copyrights SCO purports to hold on UNIX, and sought to collect, as "damages", license fees and royalties in excess of that permitted to be collected by the GPL or LGPL. (Ex.39.)

m. On August 10, 2004, SCO was reported to be threatening to raise the price of its licenses "which it says companies running Linux need to buy in order to avoid being sued". (Ex. 40.)

n. SCO's entire SCOSource division is dedicated to selling licenses that "give end users the right to use the SCO intellectual property contained in Linux, in binary format only". (Ex. 41.)

Summary Judgment Standard

Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-24 (1986); In re Grandote Country Club Co., 252 F.3d 1146, 1149 (lOth Cir. 2001). A party may seek partial summary judgment as to liability, even though there may be a genuine issue as to the amout of damages, and the same standard governs its grant. Fed. R. Civ. P. 56(c).

Argument 2

SCO HAS INFRINGED IBM'S COPYRIGHTS

Under the federal Copyright Act, "copyright protection subsists ... in original works of authorship fixed in any tangible medium of expression ... from which they can be perceived, reproduced, or otherwise communicated, directly or with the aid of a machine or a device". 17 U.S.C. 102. Such works of authorship include computer programs. See Raymond T. Nimmer, Law of Computer Technology 1:3 ("it no 1onger can be doubted that copyright law applies to software technology"). A copyright gives the holder certain exclusive rights, which it may license or assign, singly or in combination. 17 U.S.C. 106. Those rights include the right "to reproduce the copyrighted work", "to prepare derivative works based upon the copyrighted work"3 and "to distribute copies ... of the copyrighted work to the public". Id.

To prevail on a claim of copyrlght infringement, a copyright holder must establish (1) that it owns the copyright to the copyrighted work, and (2) that the alleged infringer violated one or more of the holder's exclusive rights. See Autoskill, Inc. v. Nat'l Educ. Support Sys., Inc., 944 F.2d 1476, 1487 (1Oth Cir. 1993); Intellectual Reserve, Inc. v. Utah Lighthouse Ministry, Inc, 75 F. Supp. 2d 1290, 1292 (D. Utah 1999).

In this case, there is no genuine dispute that (1) IBM owns valid copyrights in the IBM Copyrighted Works and (2) SCO has reproduced and distributed the IBM Copyrighted Works as part of its Linux software products and on its Internet website. ( 7-8, 26-60.) Accordingly, IBM is entitled to summary judgment as to liability and a permanent injunction against future infringement.

A. IBM Owns the Copyrights to the IBM Copyrighted Works.

Under the Copyright Act, a "certificate of registration made before or within five years after first publication of the work shall constitute prima facie evidence of the validity of the copyright and of the facts stated in the certificate". 17 U.S.C. 41O(c); see Gates Rubber Co. v. Bando Chem. Indus., Ltd., 9 F.3d 823, 831-32 (1Oth Cir. 1993); Autoskill, 944 F.2d at 1487-88.

IBM has submitted the copyright registrations filed with the United States Copyrlght Office for the IBM Copyrighted Works. ( 8-24.) Each was registered within five years after first publication of the relevant work. (Bennett Decl. 5.) As a result, IBM is entitled to the presumption that it holds valid copyrights to the IBM Copyrighted Works. See Gates Rubber, 9 F.3d at 831-32; Autoskill, 944 F.2d at 1487-88.

B. SCO Has Copied and Distributed the IBM Copyrighted Works.

Copyright infringement consists of the unauthorized performance of acts the copyright holder has the exclusive right to perform. 17 U.S.C. 501; See Gates Rubber, 9 F.3d at 831. As a general matter, a plaintiff may prove improper "copying", the shorthand reference for any infringement of the copyright holder's exclusive rights,4 "'by showing that (1) the defendant had access to the plaintiff's copyrighted work, and (2) defendant's work is substantially similar to the plaintiff's copyrightable material. '" Autoskill, 944 F.2d at 1489 (quoting Computer Assocs. Int'l, Inc. v. Altai, Inc., 982 F.2d 693, 701 (2d Cir. 1992)). When, however, "two works are so strikingly similar as to preclude the possibility of independent creation, 'copying' may be proved without a showing of access". Ferguson v. Nat'l Broad Co., 584 F.2d 111, 113 (5th Cir. 1978); see Gates Rubber, 9 F.3d at 833 n.9 (citing Ferguson).5

In this case, there is no genuine dispute that SCO has copied the IBM Copyrighted Works. First, SCO undeniably had access to the IBM Copyrighted Works. IBM made its code available publicly on the Internet as part of the development process for Linux and the code was incorporated into Linux. ( 25.) The IBM Copyrighted Works are available on the Internet for anyone, including in particular commercial distributors of Linux such as SCO, to download and use under the terms of the GPL or LGPL. (Id.) SCO also had access to the IBM Copyrighted Works in its capacity as a partner in UnitedLinux. (Id.) Cf. Eve of Milady v. Impression Bridal, Inc., 957 F. Supp. 484, 489 (S.D.N.Y. 1997) ("This public display of plaintiffs' bridal dresses and copyrighted lace designs in a bridal trade publication amounts to 'access' by defendants to plaintiffs' copyrighted work.").

Second, as described in detail above and demonstrated in the Addenda, more than 783,000 lines of source code from the IBM Copyrighed Works match exactly lines of source code that appear in SCO Linux Server 4.O (or, in the case of Omni Print Driver, in Open Linux 3.1.1 Asia) and in the Linux source code available for download on SCO's Internet website. ( 29-60; Addenda A-P.)6 Indeed, the code published by SCO bears the very IBM copyright notices that IBM placed on its contributions to Linux. Hence, SCO's works are not merely "substantially similar", Autoskill, 994 F.2d at 1489; they are wholly identical, such that "the possibility of independent creation" is precluded. Ferguson), 584 F.2d at 113; see also Gates Rubber, 9 F.3d at 833 n.9.

To take just one example, IBM's copyrighted source code for the "pSeries Hypervisor Terminal" work appears in its entirety in SCO Linux Server 4.O and in the Linux code that SCO made available on its website. ( 55-56.) Side-by-side comparisons of the code from one of the files from that work, as it appears in IBM's copyrighted work, and in SCO Linux Server 4.O and on SCO's website are attached as Addenda Q and R, respectively.7 As indicated in Exhibit 25, lines 1 through 364 of the hvc-console.c file in IBM's "pSeries Hypervisor Terminal" work are identical to lines 1 through 364 of the corresponding file in SCO Linux Server 4.O. As indicated in Exhibit 26, lines 1 through 364 of the hvc-console.c file in IBM's "pSeries Hypervisor Terminal" work are identical to lines 1 through 364 ofthe corresponding file downloaded from SCO's website on January 8, 2004. The same pattern of line-for-line, verbatim copying emerges from side-by-side comparison of the other pSeries Hypervisor Terminal files, as they appear in IBM's copyrighted works and in SCO's products.8 Compare Ex. 18.1 with Exs. 18.2 and 18.3.)

Through its distribution of its commercial products, SCO copied and distributed the IBM Copyrighted Works in violation of IBM's exclusive rights to do so (as the copyright holder). 17 U.S.C. 501; Microsoft Corp. v. Computer Serv. & Repair, Inc., 312 F. Supp. 2d 779, 784 (E.D.N.C. 2004) (holding that having distributed an "unauthorized copy of software in which plaintiff holds a valid copyright, defendant has infringed plaintiff's exclusive rights under the Copyright Act"). SCO also violated IBM's exclusive rights to copy and distribute its copyrighted works by making available for download on SCO's Interet website Linux source code incorporating the IBM Copyrighted Works. See Hotaling, 118 F.3d at 203; Perry, 94 F. Supp. 2d at 619, 621.
* * *
As there can be no dispute as to IBM's ownership of copyrights in the IBM Copyrighted Works and that SCO has copied those works, summary judgment as to liability is appropriate, and SCO should be enjoined from further infringement. See, e.g., MAI Sys. Corp. v. Peak Computer, Inc., 991 F.2d 511, 517-19 (9th Cir. 1993) (affirming grant of summary judgment for infringement of operating system software copyright); Wilcom, 128 F. Supp. 2d at 1032 (granting summary judgment when the copied computer code "is so similar [to the copyrighted code] that reasonable minds could not differ").

C. SCO Lacks Permission or a License to Copy or Distribute the IBM Copyrighted Works.

As stated, IBM has not authorized the copying, modification or distribution of the IBM Copyrighted Works, except pursuant to the terms of the GPL or LGPL. ( 61.) SCO does not have permission or any license to copy, modify, or distribute the IBM Copyrighted Works for at least two independent reasons: (1) SCO has repudiated and disclaimed the GPL (and thus also the LGPL) as a source of legal rights, and (2) SCO has breached the GPL and LGPL and thus lost any rights it might have had under the GPL or LGPL. ( 61-66.)

First, according to SCO, the GPL "is unenforceable, void and/or voidable"; "violates the U.S. Constitution, together with copyright, antitrust and export control laws"; is unenforceable or inapplicable in this litigation; and is preempted by federal copyright law and unenforceable under state law. SCO also claims all rights to enforce the GPL are waived and all are estopped from enforcing the GPL. ( 62.) As a result, SCO cannot here rely on the GPL or the LGPL (which is identical to the GPL insofar as relevant here) as a grant of license or permission to copy and distribute the IBM Copyrighted Works.

Second, SCO breached the GPL and the LGPL at least as early as May 2003 and thus, even if it had not otherwise repudiated and disclaimed the GPL and LGPL, automatically lost any rights it might have had under the GPL and LGPL to copy and distribute the IBM Copyrighted Works. ( 64-66.)

SCO has violated the GPL and the LGPL in several respects, including by attempting to collect royalties or licensing fees for the use of Linux. ( 64-66.) The GPL and LGPL provide, for example, that a person may not copy, modify, sublicense, or distribute code covered by the GPL or LGPL except as expressly provided under the GPL or LGPL and may not impose any "further restrictions" on the recipients' exercise of the rights granted under the GPL or LGPL. ( 64.) Among the "further restrictions" that the GPL and LGPL do not permit are collecting royalties or licensing fees (although fees can be collected for "the physical act of transferring a copy" of the code or for warranty protection). ( 65.) If modified works or machine-readable versions of open-source software are distributed, they must be licensed "at no charge to all third parties under the terms or this License". (Id.)9

As detailed above ( 66), SCO is attempting to collect, and has collected, licensing fees from Linux users, in violation of any permission or license it may have had under the GPL and LGPL. Because SCO has attempted to license Linux in violation of the GPL and LGPL, any permission or license it may have had under the GPL and LGPL (to copy the IBM Copyrighted Works) terminated. The GPL and LGPL expressly provide that any attempt othewise than in accord with the GPL's or LGPL's restrictions to sublicense works subject to the GPL or LGPL "is void, and will automatically terminate your rights under this License". ( 63.)10 SCO's efforts (under whatever guise) to collect licensing fees for GPL- or LGPL-licensed activities run afoul of the GPL and LGPL.

By its breaches of the GPL and LGPL, SCO has forfeited any protection against claims of copyright infringement that it may have enjoyed by virtue of the GPL or LGPL. SCO cannot violate the covenants that led to and underlie Linux without forfeiting the beneflts those covenants confer. Because SCO has continued to distribute and copy Linux products containing verbatim copies of IBM's Copyrighted Works after it disclaimed, renounced and breached the GPL and LGPL, SCO has infringed IBM's copyrights in those works, 17 U.S.C. 501(a), and the GPL and LGPL afford SCO no protection against IBM's claim of infringement.

Conclusion

For the foregoing reasons, IBM is entitled to partial summary judgment with respect to liability on its Eighth Counterclaim for copyright infringement and a permanent injunction against further infringement.

DATED this 16th day of August, 2004.


SNELL & WILMER L.L.P.
[signature]
Alan L. Sullivan
Todd M. Shaugnessy
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
Donald J. Rosenberg
Alec S. Berman
[address, phone]

Attorneys for Defendant/Counterclaim-Plaintiff
International Business Machines Corporation


1 The undisputed (and indisputable) facts supporting this motion are set out in the accompanying Declaration of Kathleen Bennett ("Bennett Decl."), and the documents appended to and/or authenticated by the Declaration of Amy F. Sorenson. The Exhibits referenced herein are cited as "Ex. __" and submitted with the Sorenson Declaration; the Addenda referenced herein are appended to this memorandum.

2 The undisputed facts are cited herein (in the "Argument" section of this memorandum) as " __", referring to the relevant paragraph number in the foregoing "Statement of Undisputed Facts".

3 A "derivative work" means "a work based upon one or more preexisting works, such as a translation, musical arangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast". 17 U.S.C. 101.

4 Gates Rubber, 9 F.3d at 832 n.6 (noting that "[c]opying is used herein as a shorthand reference to any infringement of the copyright holder's exclusive rights"); see also Mitel, Inc. v. Iqtel, Inc., 124 F.3d 1366, 1370 n.3 (10th Cir. 1997); Country Kids 'N City Slicks, Inc. v. Sheen, 77 F.3d 1280, 1284 n.2 (10th Cir. 1996).

5 See also Wilcom Pty. Ltd. v. Endless Visions, 128 F. Supp. 2d 1027, 1031-32 (E.D. Mich. 1998) ("The similarity here between the copy and the original is so striking, there is no possibility of independent creation. Therefore, copying can be inferred regardless of proof of access.").

6 See Hotaling v. Church of Jesus Christ of Latter-Day Saints, 118 F.3d 199, 203 (4th Cir. 1997) (offering access to materials constitutes distribution); Perry v. Sonic Graphic Systems, Inc., 94 F. Supp. 2d 616, 619, 621 (E.D. Pa. 2000) (holding that posting on website constitutes copying and distribution); Marobie-FL, Inc. v. Nat'l Assoc. of Fire Equip. Distribs., 983 F. Supp. 1167, 1177- 78 (N.D. Ill. 1997) (same); Playboy Enters. v. Webbworld, Inc., 968 F. Supp. 1171, 1174-75 (N.D. Tex. 1997) (same).

7 IBM can provide similar demonstrative exhibits for each of its copyrighted works at the Court's request.

8 The source code for each of IBM's fifteen other copyrighted works similarly matches code in SCO products and the code available on SCO's Internet webpage. (Compare Ex. 5.1 with Exs. 5.2 and 5.3 (Enterprise Volume Management System); Ex. 6.1 with Exs. 6.2 and 6.3 (Enterprise Class Event Logging); Ex. 7.1 with Exs. 7.2 and 7.3 (Dynamic Probes); Ex. 8.1 with Exs. 8.2 and 8.3 (Linux Support Power PC64); Ex. 9.1 with Exs. 9.2 and 9.3 (Omni Print Driver); Ex. 10.1 with Exs. 10.2 and 10.3 (Journaled File System); Ex. 11.1 with Exs. 11.2 and 11.3 (Next Generation Posix Threading); Ex. 12.1 with Exs. 12.2 and 12.3 (Linux Kernel Support for JFS); Ex. 13.1 with Exs. 13.2 and 13.3 (Linux Kernel S390 Support); Ex. 14.1 with Exs. 14.2 and 14.3 (Linux Kernel Support for Service Processor); Ex. 15.1 with Exs. 15.2 and 15.3 (Linux Kernel Support for Memory Expansion Technology); Ex. 16.1 with Exs. 16.2 and 16.3 (Linux Kernel Support for IBM eServer iSeries Devices); Ex. 17.1 with Exs. 17.2 and 17.3 (Linux Kernel Support for PCI Hotplug); Ex. 19.1 with Exs. 19.2 and 19.3 (Linux Kernel PPC64 Support); and Ex. 20.1 with Exs. 20.2 and 20.3 (Linux Kernel Support for Mwave Modem).)

9 See Jason B. Wacha, Open Source, Free Software and the General Public License, 20 No. 3 Computer & Internet Law 20, 22 (2003) (stating that under the GPL, "royalties are not permitted" so a copyright holder who distributes GPLed code cannot charge money for others to use code subject to the GPL).

10 See Dennis M. Kennedy, A Primer on Open Source Licensing Legal Issues: Copyright, Copyleft. and Copyfuture. 20 St. Louis U. Pub. L. Rev. 345, 360 (2001) (noting that a party's rights under the GPL automatically terminate if it attempts to sublicense works subject to the GPL "except as expressly provided under the GPL").


CERTIFICATE OF SERVICE

I hereby certify that on the 16th day of August, 2004, a true and correct copy of the foregoing was sent by U.S. Mail, postage prepaid, to the following:

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

Stephen N. Zack
Mark J. Heise
BOIES, SCHILLER & FLEXNER LLP
[address]

Robert Silver
BOIES, SCHILLER & FLEXNER LLP
[address]

_______[signature]_____
Amy F. Sorenson


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