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An Overview: Where Things Stand in IBM, Novell, and Red Hat
Sunday, July 15 2007 @ 10:01 AM EDT

I thought it would be useful, judging from some recent confusion in the media, to highlight the latest goings on in all the ongoing cases in the SCO saga all on one page, so everyone can follow the bouncing ball. That will mean some slight repetition for some of us, but it also will make it easier for those who don't follow the SCO saga as intently as we do to grasp the current picture.

The very latest is that the court has signed [PDF] the stipulated adjustments the parties proposed to the pre-trial schedule in Novell, there was a SCO status report [PDF] filed in Red Hat and here's Red Hat's latest [PDF], and there was a goofed up filing in IBM, where SCO filed its memorandum in opposition to Novell's evidentiary objections (2nd objections; Novell reply to SCO) in the IBM docket by mistake, and IBM has asked for a 30-day extension of various pretrial scheduled items. But now, let's look at the overview to see how they all interrelate, and I'll also try to give you a picture of what trial preparation in Novell is probably like right about now.


The overview is that Novell goes to trial first, starting on September 17. Here's our Novell Timeline page, where you can find the schedule and all the filings. That is logical, since a pivotal point is who is the owner of the Unix copyrights. If Novell prevails, obviously that will affect both the IBM and the Red Hat litigation, since Novell has already stated it has no objection to any of IBM's activities and Red Hat has asked the court [PDF] to declare that it has not infringed any SCO copyrights. If SCO doesn't have any, that would be that, although it would not in any way clear the deck on the Lanham Act claims Red Hat has filed. The very first paragraphs in Red Hat's complaint gives you the tone:

1. The plaintiff, Red Hat, Inc. {"Red Hat") has commenced this action in response to the unfair, untrue and deceptive campaign now being waged by the defendant, The SCO Group, Inc. ("SCO"), to harm the market for Red Hat's highly successful operating system baased on the open source LINUX kernel. As described in detail below, SCO's tactics have centered on the use of highly publicized, but vague, general and unsupported claims that portions of the LINUX kernel and operating system contain intellectual property allegedly owned by SCO, in hopes that such unfair, untrue and deceptive statements will cause users and potential users of LINUX to re-evaluate their plans to deploy LINUX as a primary component of their Information Technology infrastructure.

2. SCO's claims are not true, and are solely designed to create an atmosphere of fear, uncertainty and doubt about LINUX. SCO's own conduct demonstrates this fact. For example, beginning in or about March 2003, SCO made numerous public statements that LINUX, in some unspecified way, contains SCO trade secrets, and that LINUX users might be liable to SCO for using those trade secrets if they continue to use LINUX. Also at that time, SCO filed a lawsuit against IBM claiming that, among other things, IBM had improperly contributed UNIX software code trade secrets to LINUX. However, SCO never publicly identified a single line of the publicly available LINUX source code that allegedly contains even one SCO trade secret. In fact, at the same time that SCO was contending that the LINUX operating system included SCO's trade secrets without authorization, SCO itself continued to offer its own version of LINUX, thereby continuing to make publicly available the very computer source code that SCO was claiming to be "secret".

3. SCO apparently recognized that the supposed "secrets" that SCO itself was making publicly available through its own LINUX distribution do not qualify as trade secrets. Accordingly, SCO recently has changed the focus of its campaign against LINUX. SCO, which has itself developed and sold a version of LINUX for years, now claims to have suddenly discovered that LINUX contains computer software code that was copied from another, competing operating system that SCO claims to own -- UNIX. Again, although LINUX source code is publicly available, SCO repeatedly has refused to identify publicly even one line of SCO source code that was copied.

4. SCO's tactics are as obvious as they are unlawful. SCO makes grand public claims about the potential liability of anyone using LINUX because of the alleged violations of SCO's purported intellectual property, but then refuses to support those claims with the detail that would exist if SCO's claims were true.

Those chickens will be coming home to roost if Novell prevails on the copyright issue. Plus, in the IBM matter, it's obvious that if you don't own the copyrights to software, you can't sue for copyright infringement. And if you did and you don't have the copyrights, the intended victim gets to sue you back. So if Novell prevails on that point, SCO will be left with nothing to go after IBM for on that score, and IBM will have weighty opportunities to prevail on its counterclaims. Here's our IBM Timeline page where you can find the filings in that litigation. Here's IBM's Answer to SCO's 2nd Amended Complaint and IBM's 2nd Amended Counterclaims. IBM describes the counterclaims in the introduction in the latter filing like this:

1. These counterclaims arise from SCO's efforts wrongly to assert proprietary rights over important, widely-used technology and to impede the use of that technology by the open-source community. SCO has misused, and is misusing, its purported rights to the Unix operating system developed originally by Bell Laboratories, then a research and development arm of AT&T Corp., to threaten destruction of the competing operating systems known as AIX, Dynix and Linux, and to extract windfall profits for its unjust enrichment.

2. IBM's counterclaims also arise from SCO's infringement of IBM copyrights. ... Although SCO purports to respect the intellectual property rights of others -- and has instituted litigation against IBM for alleged failures with respect to SCO's purported rights -- SCO has infringed and is infringing a number of IBM copyrights....

In its prayer for relief, IBM is asking for declaratory relief, but also several types of damages, regular, compensatory, and punitive (note that of the 14 counterclaims, the three patent infringement counterclaims have been dropped as not worth pursuing from the financial and time-waste points of view). In one sense, it doesn't really matter to IBM who owns the copyrights, though, because its position is that it hasn't infringed no matter who owns them. But courts don't like to duplicate effort, and if it turns out that SCO sued people for copyright infringement and they don't own the copyrights, my view is that it's serious for SCO. If they *knew* they didn't own the copyrights, it's even worse.

After that trial is over, we have the trial in IBM. Even if IBM wins every summary judgment motion it has filed, all of them now pending rulings from the court, their counterclaims against SCO will remain, so there will almost certainly be a trial, unless SCO were to go bankrupt and the bankruptcy trustees cry uncle and settle on terms acceptable to IBM. Bankruptcy trustees might not feel that the case is worth pursuing, because their job doesn't include FUD production, and they could even appoint new lawyers. All of this is conceivable in the context that Novell has asked the court in its Second Amended Complaint with Counterclaims, also in a motion for summary judgment awaiting a ruling by the court, to compel SCO to pay Novell what it says SCO owes them contractually, which is a sum greater than what SCO has. After that trial is done, Red Hat gets to proceed against SCO, if it's worth the bother at that point. Here's the Red Hat Timeline page, where you can find all the filings and the schedule for that litigation.

Trial Preparation in SCO v. Novell

It may seem from the Pacer listings that very little is happening, but that is misleading. What is going on right now is intense trial preparation in the Novell case. This is the moment when you have to get real and finalize what you plan to present to the jury. You got a hint of that in IBM's most recent filing, in which it asked for a 30-day extension, and it noted that SCO had expressed concerns about having to meet deadlines in the IBM case at the same time as it must go to trial in Novell. That is, of course, the down side to suing the world and its dog.

Neither side knows for sure how the judge will rule on the various summary judgment motions, so they are no doubt preparing for everything, just in case. For example, Novell has filed a motion to strike two of SCO's expert reports, but until the court rules on that motion, Novell has to prepare to counter the contents of the reports, just in case. Let me give you an idea of what this preparation might be like.

By preparing, you first have a strategy, a plan of how you wish to present your side. That was roughed out before discovery even started, and tweaked as needed. And now it's time to decide what witnesses will be asked, both your own and the other side's -- expert witnesses have to present in advance what they plan to testify to -- and you have to get your documentary evidence ready. I mean by that organized in your computers. There are specialty applications for lawyers that help them track such things from the beginning of discovery onward and through trial, so they can have them ready at hand, not only for their presentation but also for use in cross examination. Here's one's company's offerings, picked at random by my friend, Google, and this is an example of an application you could use at trial. They have a demo to give you an idea. Here's an example of preparation of another speciality application. It's Microsoft-oriented, so good luck with that, fellows. But until the FOSS community provides applications like this, as I'm sure they will over time, lawyers will be stuck, unless they know how to use Wine or virtualization.

Not all firms use such applications, but litigators, particularly in large firms, mostly do. Here's a report by the ABA on lawyers using technology, and you will see large firm litigators are the cutting edge. I'm marking on a curve, of course, because lawyers are not famous for early adoption of tech. That's in part because courtrooms usually are not high tech, so the firms generally have to provide their own hardware. It can all be quite expensive, so smaller firms may not have as many tech options. I have little doubt that at least Cravath uses such applications, and probably Boies Schiller also. You can do it all on paper, of course, but as courts go digital, and they are in the US, it's obvious that eventually preparation will all be digital. Then maybe we won't have so many misfilings. Nah. Kidding. Computers can't know more than the humans that do the input. But applications can certainly help notice obvious mistakes, if they are programmed for it.

Now, I said that the parties don't know how the judge will rule on the summary judgments, but usually both sides can kind of figure out the probabilities of who is likely to prevail in summary judgment motions, though, so they will be stressing preparation of those elements they are sure to need. So, although it's out of the public eye, a lot more is happening behind the scenes than we can see, but at trial, you will see the fruits of that labor.

Latest Docket Entries in Novell and IBM

First, here's the Docket for Novell:

367 - Filed & Entered: 07/10/2007
Terminated: 07/11/2007
Motion for Scheduling Order
Docket Text: Stipulated MOTION for Scheduling Order (Pretrial Schedule) filed by Defendant Novell, Inc.. (Attachments: # (1) Text of Proposed Order) Motions referred to Brooke C. Wells.(Sneddon, Heather)

368 - Filed & Entered: 07/11/2007
Pretrial Order
Docket Text: PRETRIAL ORDER Setting dates/deadlines. Final Pretrial Conference set for 9/11/07. Jury Trial set for 9/17/2007 08:30 AM in Room 220 before Judge Dale A. Kimball.See order for all dates/deadlines set. Signed by Judge Dale A. Kimball on 7/11/07. (blk)

Here's the Docket listing for IBM:

1070 - Filed: 06/18/2007
Entered: 06/19/2007
Sealed Document
Docket Text: Disregard this entry. Wrong case number was placed on document. This will be filed in case number 2:04cv139. **SEALED DOCUMENT** EXHIBITS to SCO's Memorandum in Opposition to Novell's Evidentiary Objections to SCO's Exhibits Submitted in Support of its Summary Judgment Oppsitions Filed May 18, 2007 Incorporating by Reference Novell's Evidentiary Objections to SCO's Summary Judgment Exhibits filed by Plaintiff SCO Group. No attachment - document retained in the sealed room. (blk) Additional attachment(s) added on 6/19/2007 - cover sheet of document (blk).

1071 - Filed & Entered: 06/19/2007
Modification of Docket
Docket Text: Modification of Docket: Document 1070 was entered on this case because it is the case number put on the pleading by counsel. The clerk has been informed that the case number is incorrect. Counsel are advised to review pleadings before filing them to ensure that the case information is correct, as the clerk will docket it on the case number given on the document. re [1070] Sealed Document. The Clerk will docket this document on case number 2:04cv139. (blk)

1072 - Filed & Entered: 07/13/2007
Motion for Extension of Time
Docket Text: MOTION for Extension of Time of Deadlines in May 29, 2007 Order filed by Defendant International Business Machines Corporation, Counter Claimant International Business Machines Corporation. (Attachments: # (1) Text of Proposed Order) Motions referred to Brooke C. Wells.(Shaughnessy, Todd)

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