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Groklaw's Eyewitnesses Report From the Courtroom - It Went Well
Thursday, April 21 2005 @ 08:46 PM EDT

Chris Brown went to the hearing today, and he has just now returned. It sounds from his report that everything went really well. SCO, he says, tried again to read from confidential email, but IBM's David Marriott brought it to Judge Kimball's attention and it was brought to a halt. Can you believe these guys? Anyhow, from what Chris writes, I get the impression that SCO's chances are not so good for being able to amend the complaint again. I wasn't there, though, so I can't stand on any dime on that. See what you think.

I received two other reports from readers, and they each noted pretty much what Chris did, but amplify the color of the day by saying that when SCO's attorney Sean Eskovitz went, during his speechifying, to get some bottled water to drink, Judge Kimball asked him, "You don't trust our water here?" One reporter says Utah water is notoriously bad, and Judge Kimball said it as a joke. Eskovitz kept on drinking water from the bottle too. (Update: Chris explains more fully: "The water provided by the court was a carafe on each table and some platic cups. SCO brought Dasani. When Escovitz paused to open his Dasani, Judge Kimbal asked: 'Don't you trust our water?' Escovitz replied: 'I'm afraid of spilling it.' (referring to the plastic cups). Just wanted to provide the second half of the exchange.") Here's Chris's full report.

[Update: Bob Mims' article. The one piece he adds is that Darl McBride has not yet been deposed. SCO intends to make him available, but it didn't happen yet. One more thing. Linux Business Week is now Linux Business News. Maybe Business Week noticed a trademark violation? The new url for the masterpiece on the discovery order is but for an unbiased account, try Jim Wagner's on Internet News. ]


SCO read some quotes from some sealed emails AGAIN and IBM interrupted to point that out to Kimball, who stopped it. Kimball even opened the hearing saying he believed they could talk about the sealed material referencially without revealing anything and that he was therefore keeping the courtroom open. IBM had David Marriott, Todd Shawnessy, and one other attorney who didn't speak, who was at the October hearing. SCO had Edward Norman, Sean Escovitz, and Brent Hatch (Brent didn't speak).


1) Motion to Compel Sam Palmisano
2) Motion to Amend Complaint / Motion to Narrow 9th Counterclaim
3) Schedule

I'd say 1/4 of the time was spent on the Motion to Compel, 2/3s of the time on the Motion to Amend, and the small part left over for the Schedule.

There was very little raised that has not been in briefings filed so far, with the notable exception of IBM's numerous examples of how SCO either DID know about SVR4 being used in AIX for Power or that they should have known. At times it sounded like Marriott was simply reading Groklaw references. But there were some good quotes from internal correspondence between Santa Cruz Operation Inc. and IBM that clearly demonstrated that, at least, *they* knew what was going on and therefore if The SCO Group didn't know, tough luck. IBM even quoted material received from SCO in discovery in this case that they said demonstrates that SCO knew about it long before the deadline for amending had passed.

IBM spoke at length about how SCO shouldn't be allowed to amend now based on their knowledge long before the deadline, and how they fail to meet any of the various requirements for amending now.

There was also quite some discussion about the Project Monterey JDA (Joint Development Agreement)'s sections 20.1 and 22.3. About the 2 years, the venue, and the no-waiver provisions. Mr. Norman explained how they believe IBM waived the no-waiver provision; I didn't understand it though. Mr. Norman also claimed IBM had waived the venue provision by bringing the agreement into this case via the 9th Counterclaim. He also claimed the 2 years don't apply because SCO *just* found out about all this.

Amusingly, later on in Mr. Norman's Reply to Mr. Marriott's Reply to Mr. Norman's Reply to Mr. Marriott's arguments, that, Yes, perhaps SCO did know earlier, but what SCO *didn't* know was that IBM themselves (by way of the, now sealed, communications) believed they were violating the terms of the agreement. He tried to say that if IBM thought they were violating their license, yet knowingly carrying on, then IBM did something wrong.

IBM demonstrated by numerous methods that SCO had given IBM permission to use SVR4 code in AIX for Power and was even helping IBM market AIX for Power & AIX-5L expressly telling people publicly that it contained SVR4 code (and most markedly telling people it contained SVR4 Printing Subsystem). IBM provided overwhelming evidence that SCO knew, was helping to integrate SVR4 code into AIX (including Power), and was telling the world about it through marketing, press releases, and interviews. That SCO didn't do anything about it back then was evidence that IBM had the license despite what some Mr. Peterson (the controversial sealed-email author) may have believed or wondered about.

Judge Kimball had asked a question of Mr. Marriott about the Motion to Narrow the 9th Counterclaim that I couldn't quite make out, nor could I quite make out Mr. Marriott's answer, but Judge Kimball said something to the effect that, "He'll just refer to that motion as IBM's motion to CLARIFY the 9th Counterclaim rather than Narrow it". It looked like Kimball believed IBM was not trying to change their 9th CC as SCO kept trying to tell people they were. This gives me the opinion Kimball's not buying that motion as permission for SCO to amend again.

Anyway, those were the highlights.

Groklaw's producer adds something interesting about the Palmisano discussion:

All SCOX could do was rehash the same argument about Project Monterey not being about PPC but only Itanium. Mr. Marriott put that to rest. And they need to depose Sam Palmisano, SCO said, because he knows everything there is to know about Linux. Mr. Marriott didn't agree. He made the point, a few times, about IBM being a Fortune 100 company and added that IBM has 300,000 on payroll versus SCOX with around 100. They wanted to depose Darl since he was at the forefront of all this, as opposed to Mr. Palmisano who hasn't opened his mouth.

According to our third witness, who prefaces his report by saying that he is a bit hard of hearing and the acoustics were difficult in the courtroom, so he only stayed for about half of the hearing, SCO's attorneys waxed indignant that size should matter as to whether a CEO is deposed or not. And here are his notes:

21 April 2005 SCOvsIBM Hearing:

I arrived at 3:00 pm. and in the few minutes before Judge Kimball entered I noted: that the courtroom was paneled in walnut with square and round Corinthian half columns, with a white ceiling (about 25 feet high) with blue/gold ornamentation and a cream carpet with blue borders. While the court was impressive and much larger and grander than Magistrate Well's court, I would soon find the acoustics were extremely poor. Either because of a less-than-state-of-the-art sound system or my own limitations (I have hearing loss at certain frequencies) I unfortunately missed much of what went on, but I can tell you what I did hear, see, and intimated.

Judge Kimball entered. . . . He said that he saw no confidential matters in motions one and three, and that the confidential nature of motion two could be argued around.

SCO's attorney argued that Sam Palmisano spearheaded IBM's Unix to Linux initiative (while a V.P.) prior to becoming President/CEO; that only a seven-hour deposition was necessary; and that he should be deposed. He continued stating 1) that Mr. Palmisano had unique knowledge as to why IBM pursued its Linux strategy, and 2) that strategy was central to SCO's case. He referenced (I believe a Sam's Bet) (Chris Brown: "Sam's Bet" was the reference... A quote from, I believe, A March 2000 New York Times story on Sam's Linux strategy.) IBM's technology czar, although I could not hear why. The presentation was boring and I kept asking myself, "How did IBM's move to support Linux harm a Linux company?"

He said that IBM deposed SCO's CEO and that they (SCO) should be allowed to depose IBM's CEO. . . . He continued by saying that they could not find as much as an e-mail in Mr. Palmisano's file relating to Linux and IBM did not give an explanation - only Mr. Palmisano can explain.

Mr. Marriott responded (he was more animated and easier to hear): IBM disagrees with SCO and recognizes the obligation to provide discovery. He listed several cases supporting his argument and concluded that it was not appropriate to call Mr. Palmisano at this juncture. He said something about 1) pursuasive authority and the CEO should not be called except where he had unique knowledge - referenced a Bridgestone/Firestone case. 2) Mr. Palmisano does not have unique personal knowledge relating to the contract (he did not negotiate, nor had any other connection with it). He argued that IBM produced thousands of pages, three high-level executives, and that everyone has unique perspectives (but Mr. Palmisano's would not help in this situation).

Mr. Eskovitz's reply: IBM didn't show that IBM didn't know anything. (I always thought that it was impossible to prove a negative argument). IBM said that SCO should show that Mr. Palmisano does have personal knowledge. (Went for water again). Since Mr. Palmisano was V.P., and spearheaded the Linux initiative, he should not be shielded as CEO. He was 'blown away' by IBM's suggestion that relative company size should matter in determining if a CEO should be deposed. (You had Darl; we should get Sam). His reply was more animated, but he was still difficult to understand.

Motion #2: third amended complaint

Another SCO attorney, Mr. Norman, I think, began by referencing the late 1900's and Project Monterey (he adjusted the mike and was easier to understand - but toward the end of sentences his voice trailed off and (at least to me) sounded as if he was mumbling). He made these points: If IBM canceled Project Monterey they had no right to SV4 code; IBM could only use SV4 code in AIX; and one other I couldn't hear. "SCO will show that IBM misappropriated code." IBM identified 19 individuals with Project Monterey knowledge. He referenced an IBM internal e-mail and began reading the confidential document. (Chris Brown explains: "SCO *did* say they had found a email from Palmisano on the internet about Linux, but that IBM had not produced a copy of it in production. SCO wanted to know why.")

4:15 pm:
Mr. Marriott:

Said that there were a number of reasons to deny SCO's motions

1) Untimely;
2) Scheduling order was not to be amended (something about rules 15 and 16);
3) IBM will show, using SCO's documents, that IBM included SV4 code in AIX as part of Project Monterey; and he began reading from a booklet he presented the Judge and SCO, that SCO knew about IBM's plans for Project Monterey and its use.

Further, he claimed that SCO is trying to file it's amended complaint after the deadline to do so and that SCO originally claimed no distinction from Santa Cruz, oldSCO, yet now they wish to distance themselves from (original)SCO. SCO should know or should have known about the (original)SCO - IBM relationship.

At some point during the preceding, near the deadline discussion, Judge Kimball looked upward in what I took as an "I got it moment".

Unfortunately, because I was missing most of what was said, I left around 4:35. I'm sure that others can fill in information that I either didn't hear or didn't understand (did I mention IANAL). I hope that this report may prove helpful to those following this case.

Since Chris's first report, he mentions one other element:

SCO found an email from Palmisano on the internet pertaining to Linux and wanted to know why IBM did not provide a copy of the email in discovery. I got the impression the email was just telling about IBM's Linux strategy, but not anything of consequence by its contents. SCO was simply using it as evidence that IBM was not providing complete discovery from Palmisano.

So I asked Chris what he thinks the judge might do, what his impression was of who won what. Here is his call:

I left the hearing believing SCO was likely to get Palmisano. SCO's assertion that as VP he was the one who spearheaded IBM's Linux strategy seemed to carry the day. SCO argued that only Sam could provide the REASONS for his decisions that would answer SCO's 4th claim relating to Tortious Interference and trying to destroy Unix. IBM's assertions that Palmisano's knowledge would not be unique doesn't cut it. IBM had asserted that Palmisano had not executed the strategy and that others knew more. SCO had also asserted that while they had deposed three other executives under Palmisano, all three of them had said that Palmisano had made the decisions, not them. This, I believe, probably will carry it for Kimball.

I believe SCO will not be able to get their Third Amended Complaint through. SCO's arguments were weak in comparison to IBM's overwhelming evidence that SCO has known about SVR4 code being in AIX for Power for YEARS and failed to make a complaint about it. IBM had shown that SCO had received 3 of the 6 documents SCO is relying on to amend from 3 to 6 months BEFORE the deadline to amend. IBM did a good job of showing SCO had too little, too late, in the wrong venue, on something IBM had a right to do. I'm confident SCO will not be able to overcome the conditions set forth to amend their complaint now.

Scheduling? There wasn't enough said to form an opinion on it. I take that back... There was discussion on SCO needing to show their cards before the end of discovery. I'm confident, especially from Judge Kimball's remarks on denying the dispositive motions, that he will require SCO to state, with specificity, what the allegedly infringing material is before the end of discovery.

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