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AutoZone Update - And Another Update - And Another
Friday, October 30 2009 @ 07:52 AM EDT

Just to keep you in the loop, there is an update in the AutoZone docket, a note rescheduling oral argument on AutoZone's motion to dismiss in part SCO's claims for damages. It will now be held on December 7 at 10 AM. Except of course that it probably won't, since the parties -- SCO's Chapter 11 Trustee Edward Cahn for SCO and AutoZone -- have stipulated to a resolution of the litigation in toto. But until that is approved by the bankruptcy court and then filed and entered in the AutoZone litigation, the litigation has to continue to tread water, so to speak, until it's official. The agreement is a conditional one, and should the condition of confidentiality be violated, then the litigation goes forward too. So, this is like a bookmark, saying that it will be scheduled for the 7th, but likely it will get postponed again or never happen at all.

AutoZone's filing was so powerful, it inspired a settlement. Future victims of SCO's SCOsource Silliness -- and that is obviously the hope, to ramp it up again someday if all the stars align just right -- might wish to take notes on how they did it. Although we can't read the confidential settlement, we can see what inspired it, and that alone is helpful.

AutoZone, if you recall, wrote: "AutoZone denies that Santa Cruz purchased the UNIX technology from Novell, Inc. or that SCO acquired this technology from Santa Cruz." But it also denied that any of SCO's legal rights were violated. AutoZone had licenses and agreements with third parties, it pointed out, giving it the right to run the code it used, or didn't actually use but which was found sitting on a forgotten server. It also was going to make SCO prove that it owned any proprietary code in that third-party code SCO challenged, such as CompX, and it pointed out that SCO failed to register copyrights in the code it claimed ownership of, so it wasn't entitled to statutory damages as a matter of law, even if its legal rights had been violated.

Here's the note in the docket:

10/29/2009 - 115 - MINUTE ORDER IN CHAMBERS of the Honorable Judge Robert C. Jones, on 10/29/2009. By Deputy Clerk: K. Goetsch. Based upon the stipulation of the parties, and the Court's approval of same, IT IS HEREBY ORDERED the oral argument RE: 108 MOTION to Dismiss in Part Plaintiff's Claims for Actual Damages, Statutory Damages and Attorneys' Fees is RESCHEDULED to 12/7/2009, at 10:00 AM in LV Courtroom 7D before Judge Robert C. Jones.(no image attached) (Copies have been distributed pursuant to the NEF - KXG) (Entered: 10/29/2009)

Update: Indeed, the parties have now filed a stipulation to stay proceedings, asking for 60 days' stay to give the bankruptcy court time to hold a hearing on November 22nd and if the agreement is approved, the parties will file a stipulated dismissal of the litigation. If it is not approved, then they'll ask for a change in the scheduling:

10/30/2009 - 116 - STIPULATION TO STAY PROCEEDINGS by Plaintiff SCO Group, Inc.. (Pocker, Richard) (Entered: 10/30/2009)

Update 2: It has been approved:
11/02/2009 - 117 - ORDER ON STIPULATION Granting 116 Stipulation to stay for 60 days. Signed by Magistrate Judge George Foley, Jr. (Copies have been distributed pursuant to the NEF - AXM) (Entered: 11/02/2009)

It reads like this:

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

Richard J. Pocker
Nevada Bar No. 3568
BOIES, SCHILLER & FLEXNER LLP
[address]
[phone]
[fax]

Robert Silver
Edward Normand
BOIES, SCHILLER & FLEXNER LLP
[address]
[phone]
[fax]

Stuart Singer
BOIES, SCHILLER & FLEXNER LLP
[address]
[phone]
[fax]

Attorneys for Plaintiff, The SCO Group, Inc.

James J. Pisanelli
Nevada Bar No. 4027
Nikki L. Wilmer
Nevada Bar No. 6562
BROWNSTEIN HYATT FARBER
SCHRECK
[address, phone, email]

David J. Stewart
Georgia Bar No. 681149
ALSTON & BIRD LLP
[address, phone, email]

Attorneys for AutoZone, Inc.

UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA

THE SCO GROUP, INC.,
A Delaware corporation,

Plaintiff,
v.
AUTOZONE, INC.,
A Nevada corporation,

Defendant
Docket No.: 2:04-CV-237-RCJ-(LRL)

JOINT STIPULATION TO STAY
PROCEEDINGS

(1)

JOINT STIPULATION TO STAY PROCEEDINGS

Plaintiff The SCO Group, Inc. (“SCO”), by and through its Chapter 11 Trustee (the “Trustee”), and Defendant AutoZone, Inc. (“AutoZone”) respectfully move the Court to stay all proceedings in this case for sixty days.

On October 21, 2009, the Trustee and AutoZone entered into a Confidential Settlement and Release Agreement resolving all the claims at issue in this case, subject to the approval of the Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”), which is presiding over SCO’s bankruptcy proceedings (Bankruptcy Petition No. 07-11337KG). On October 22, 2009, the Trustee filed a Motion for Approval of Settlement with AutoZone. The Bankruptcy Court will hold a hearing on that motion, if necessary, on November 22, 2009. Should the Bankruptcy Court approve the settlement agreement, the parties have agreed to file a stipulated dismissal of this action with the Court.

In light of the agreement to settle this case, the parties request that the Court stay this litigation for sixty days to allow time for a ruling on the motion for approval of the settlement. If the Bankruptcy Court grants that motion, the settlement will avoid unnecessary expense and use of the Court’s resources. For these reasons, the parties respectfully move to the Court to stay these proceedings in full for sixty days.

In addition, should the Court grant this motion and the Bankruptcy Court deny the motion for approval of the settlement, the parties request that the Court re-open proceedings and hold a case-management conference to reset the deadlines currently pending in this litigation.

A proposed order is attached hereto for the Court’s convenience. Respectfully submitted, this 30 th day of October, 2009.

/s/ Richard J. Pocker
Nevada Bar No. 3568
BOIES, SCHILLER & FLEXNER LLP
[address, phone]
Attorney for The SCO Group, Inc.

/s/ David J. Stewart
David J. Stewart
Georgia Bar No. 681149
ALSTON & BIRD LLP
[address, phone]

Attorney for AutoZone, Inc.


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