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Attorneys React to Wells' Order -- It's Routine
Saturday, January 22 2005 @ 07:07 PM EST

I certainly thought the SCO PR machine would go into full gear with Judge Wells' discovery Order, but if they have, the only ones who seem impressed are Maureen O'Gara, Laura DiDio and Daniel Lyons, as you would expect.

Here is a representative sample of unbiased reactions. First David Coursey, in his The Coursey Report newsletter, which is delivered by email, and who hasn't been a rabid SCO critic by any means, says they won a round, but so what? Here is what he thinks will happen:

SCO Wins a Round, So What?

Also on this week's agenda was a rare good day for SCO in its battle with IBM and the rest of the world.

Here's what I think will happen: The trial won't take place until sometime in 2006, at the earliest. In the meantime, SCO will leave its money-losing Unix products business. SCO will continue its legal battles, eventually losing when it is determined that the agreements bringing ownership of Unix to SCO don't give it standing to sue competitors (or anybody else).

It's sad to see a company that used to be such a happening place become such a total loser.

Stephen J. Vaughan-Nichols collected reactions from attorneys in an article, "How Significant Is SCO's Win?", and the consensus was pretty much what I told you my reaction was, that it was a pretty normal discovery order that doesn't mean much in the long run.

Vaughan-Nichols also asked Laura DiDio for her reaction, although why he thinks Ms. Didio would be able to speak about the law is a mystery to me. Maybe he did it for the fun of it. And she doesn't disappoint us there. The article says that "DiDio also found the following comments from Wells possibly indicative of the latitude she may grant SCO if and when this case ever gets to court." The simple fact is, Wells isn't the judge that will try this case. So that was an enjoyable moment for me.

But to give her her due, she does accurately point out that IBM is in a much better position than SCO to have the case drag on and on. I believe IBM has demonstrated its ability to do that successfully in the past. And as Coursey points out, time is not SCO's friend. If they really thought they had a winning case, he writes, they wouldn't be seeking delays.

Allonn Levy, a partner in the San Jose, Calif., law firm Hopkins & Carley, told Vaughan-Nichols this isn't much of a victory:

"After a series of very public setbacks, SCO is looking to demonstrate a 'win' in its high-profile Linux cases," Levy said. "Unfortunately, Judge Wells' order probably isn't as dramatic a victory as SCO would like. In reality, the court issued a fairly routine discovery order compelling IBM to respond further to certain discovery and ordering it to turn over certain source code and documents."

And that is exactly what I told you, too. I got an email from a discouraged reader, thinking I was just spinning a huge loss. I never spin, though. If I thought IBM had taken a beating, I'd tell you straight up. And now you can verify that I was on the money, according to the lawyers interviewed.

Vaughan-Nichols also asked Kelly Talcott, a partner with international law firm Kirkpatrick & Lockhart Nicholson Graham LLP, to comment, and while she notes the contract wording in the Order, she agrees the bottom line is that this was a garden variety discovery order:

"The magistrate judge pointed out that SCO's breach of contract claims could end up playing a more important role in the case than the copyright infringement claims because they could implicate code that does not infringe any SCO copyright," she said.

But with all that in mind, Talcott emphasized that "the ruling only addressed whether IBM had to produce the code [as well as some other discovery issues]. It is not a ruling on the viability or not of SCO's breach of contract claims. But, by highlighting IBM's potential liability under the contract claims, the magistrate judge has given IBM something to think about." . . .

All in all, "at one level it is not terribly significant, given the general deference to broad discovery built into the U.S. legal system," Talcott said. "Anything that is reasonably likely to lead to the discovery of admissible evidence is fair game for discovery."

Thomas Carey, chairman of the business practice group at Boston-based Bromberg & Sunstein LLP, a IP firm, also said the order wasn't surprising:

"From the viewpoint of efficiency, this was an unfortunate order because it will cost IBM plenty to comply with, and the magistrate failed to limit the scope of discovery to matters that could really be a violation of the contract," Carey said. "But from the viewpoint of what normally appears at this stage of a lawsuit, it is not surprising. Plaintiffs typically are given wide latitude to hunt through a defendant's files to look for a smoking gun."

By far the most interesting comment, to me, was what Levy said here:

"Ironically, this order forcing IBM to disclose more information to SCO may help IBM in its efforts to obtain summary judgment by removing any argument by SCO that information necessary for its case has been withheld—a point Judge Wells seems to allude to in her order."

Vaughan-Nichols astutely quoted this section of the order:

"Based upon the possibility of increased protection under the contract and the general principle that 'at the discovery stage, the concept of relevance should be construed very broadly,' the court finds that the burden of producing the code SCO seeks is outweighed by the relevancy of such code in the instant dispute," Wells wrote in her decision.

Very broadly is the key phrase here.

I think, personally, that Wells misunderstood what homegrown code means, in the IBM context. Or her clerk did. I find it hard to believe that a female wrote this Order. For one thing, the footnote about football is a big hint. I fully expect that whatever IBM does or doesn't do, they surely noticed this misunderstanding too. If I have noticed, they surely wouldn't miss it.

What Wells failed to even mention and obviously didn't factor in is Amendment X and all the side agreements that clearly give IBM the right to code they write themselves, the homegrown code, so long as no original System V code is in there too. For Wells to write that IBM can strengthen its case by proving that they didn't contribute this homegrown code to Linux is to reveal that she doesn't understand what IBM's case is about, what IBM means when it says homegrown code, or what their rights are. Of course they have contributed that code. It's hard to imagine how the judge could have missed that, and unfortunately for IBM, her misunderstanding sends them on a time consuming and expensive hunt for info that won't resolve the issue the judge posits. To miss something that basic does make one wonder whether IBM will appeal. They surely and obviously could.

But educating judges is what lawyers do. It's a process, and just because a judge misses something in an early round, it doesn't mean they won't catch on later. IBM will have to do a better job of explaining. And they know exactly what to explain better now.

Here's what I wonder. I assume SCO probably knows already that they won't find any code that infringes. They probably won't do much to even check. What I'm thinking they might do is try to search the comments by keywords, like AT&T, license, etc. If IBM fails to include someone on the list of 3,000 that they find a significant comment from, they'll scream bloody murder about IBM hiding and shucking and jiving. They keep trying to paint IBM as the bad guys. So far, IBM has been too polite to paint them as nuisance litigators. For the order to say that the judge attributes good faith to both sides is a big clue that perhaps IBM have been just too nice and too polite. Anyway, if it were a case I was working on, and we got that order, and anybody asked me my opinion, that is what I'd tell them.

Some have written to ask me if I thought the fix was in. I don't. I recall, as some of you do, that SCO foreshadowed a win in this discovery motion in broad strokes. And that can seem odd. But even I wrote that I thought SCO would get something more in discovery, just because they whined so loud for one thing, and because discovery is what it is. You know I'm not part of any pro-SCO plot. It seems reasonable to me that SCO's lawyers could figure if they complained enough, they'd get more. That is why they did it. But the Order gives IBM all kinds of reasons to appeal, not SCO, and if the fix was in, it wouldn't have been written that way.

What I wonder about instead is this: If there is some discussion between Kimball and Wells, I think if this Order signifies anything, it may signify that the copyright decision is going to go against SCO, leaving only the contract claims. I note the emphasis Wells put on that point, and it may be reflective of what she knows. If that is a correct understanding, and I'm just guessing, folks, then Linux would be more or less in the clear as far as SCO going after end users for DMCA infringement. That was a big part of their original dream. That was the greatest fear I had from the beginning. I always knew IBM could take care of itself.

Perhaps the contract claims will end up going to trial, if Kimball misses Amendment X too and also misunderstands homegrown code, just because they have to if there is even one plausible theory of the case that requires a jury. If a judge doesn't understand what homegrown code is or doesn't factor in Amendment X, and therefore finds a theory plausible, it could go to trial, based on that misunderstanding. Not to burst any bubbles, but judges are human, and you just have to continue to show respect even when they goof, even when it isn't fair, isn't right, etc.

It's like any other conversation. I'm sure you've all had discussions with a mate or friend where you explained something perfectly, and they still didn't get it. Our life's dramas are frequently built on such materials, no? It's no different in litigation. You explain to the judge. They don't get it. So you swing around and explain it again, from a different angle, or more simply, or with a different emphasis. That is part of the process.

They can't always get it perfectly, no matter what you do, and sadly that is particularly true so far in tech cases. The next generation of judges will be easier. But they do sincerely try most of the time. And, with all the checks and balances built in, in the end you usually do get close to the right result.

So, IBM knows now what it needs to work on to help her, or her clerk, to understand the tech better and the theory of their case. And I'm sure they will.

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