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SCO Motion for a Status Conference in SCO v. IBM - Updated 2Xs
Saturday, August 07 2010 @ 11:22 AM EDT

SCO has filed a motion asking for a status conference in the SCO v. IBM litigation. It would like IBM to be blocked from pursuing its copyright counterclaims, while asking the court to let SCO go forward on its contract claims, which SCO now asserts are not affected by the loss it sustained in the SCO v. Novell litigation. [ Update: See the update, for a more accurate description in detail. But in brief, SCO is asking that two of IBM motions for summary judgment on SCO's claims go forward and nothing else.]

That is a puzzling conclusion, in that Novell was ruled to have the unfettered right to waive any such alleged contract violations. And it did long ago do so.

The bankruptcy stay, SCO writes, applies only to litigation against SCO, not SCO suing "IBM and others". Note that "and others". So it would like the court to perhaps rule on SCO's summary judgment motions filed years ago, and to the extent IBM has motions regarding two of SCO's claims, regarding SCO's claims for Unfair Competition and for Tortious Interference, they can go forward to a decision. But not the rest of the IBM counterclaims. Here's a Groklaw chart of all the pending IBM and SCO summary judgment motions that were blocked by the SCO bankruptcy in 2007.

But, I hear you say, that's not fair. Well. I look at it this way: if SCO started to play fair, it might upset the balance in the universe in the butterfly's wings sense. So it's very careful never to be fair and to stay in character. And let's be real. The only way SCO can win is probably if no one else is allowed to say or do anything. That's the kind of playing field SCO would like.

The Notice of Hearing sets August 11 at 3:00 PM before Judge Tena Campbell as the day and time. So I hope some of you can attend. It should be fun. IBM will certainly have something to say about this latest oily move.

Here is the motion and the docket entry about the hearing:

1089 - Filed & Entered: 07/30/2010
Motion for Hearing
Docket Text: MOTION for Hearing re Status Conference filed by Plaintiff SCO Group. (Normand, Edward)

1090 - Filed & Entered: 08/05/2010
Notice of Hearing
Docket Text: NOTICE OF HEARING: (Notice generated by Mary Jane McNamee) Status Conference set for 8/11/2010 at 3:00 PM in Room 230 before Judge Tena Campbell. (mjm)

You might find it interesting to compare this filing with the one SCO filed back in 2007, after Novell won the first time on summary judgment. The then-judge presiding over this case, the Hon. Dale Kimball, asked SCO and IBM to let him know what each thought was left to try. SCO refers to those filings, or more accurately, it refers to IBM's, which you can find at the same page, and it acknowledges that it was then IBM's view that all SCO's claims against it were mooted by the Novell win. Here's what IBM's conclusion was:
Conclusion

For the foregoing reasons, the Novell Decision: (1) effectively forecloses all of SCO's claims; (2) requires summary judgment in favor of IBM on several of its counterclaims and strengthens IBM's remaining counterclaims; and (3) impacts all of the pending motions.

So SCO expects there will be some need for discussion about that, as well as the scope of bankruptcy stay, so it asks for the status hearing.

They know this request is not going to go down without IBM pointing out the essential unfairness of using bankruptcy protection to avoid litigation, while aggressively pursuing your side of it.

But it's more nuanced than that. Notice what IBM wrote in 2007 about the SCO claims for tortious interference and unfair competition, which are the two IBM motions that SCO thinks can go forward now (and here they are, IBM's #782 and #783 [PDFs]:

3. Tortious Interference Claims

In addition, SCO has asserted three claims against IBM for tortious interference (Counts VII to IX). Count VIII accuses IBM of inducing Novell to assert copyright and waiver rights that SCO argues Novell does not have under the APA. The Novell Decision forecloses this claim because it makes clear that Novell has the rights IBM is alleged to have induced Novell to exercise: Novell owns the copyrights, and it has the right to waive SCO's claims. Moreover, the Court's ruling precludes any claim by SCO that it would have been an act of bad faith for IBM to induce Novell to assert ownership of the copyrights or to waive SCO's claims.

Insofar as SCO's Counts VII and IX depend on the proposition that IBM acted improperly in contributing its own code to Linux, they are likewise precluded. Count VII alleges IBM interfered with SCO's business relationship with 175 companies (besides Novell) by urging them to use Linux (instead of SCO's Unix products) while knowing that Linux included stolen UNIX code. Count IX alleges that IBM interfered with SCO's business relationships with six other entities by urging them not to do business with SCO because of SCO's efforts to protect the allegedly stolen code in Linux. As stated, the Novell Decision precludes SCO from challenging IBM's contributions of its own code to Linux because Novell waived such claims and because Novell, not SCO, owns the copyrights in the allegedly infringed UNIX and UnixWare code. As a result, the decision undermines the central premise of these claims.

We believe the Court can decide IBM's summary judgment motion and dispose of SCO's tortious inference claims based on the Novell Decision alone. But here again, deciding issues not addressed by the Novell Decision would further develop the record and, we submit, result in alternative grounds for the Court's ruling, such as the lack of evidence of interference by IBM.

4. SCO's Unfair Competition Claim

Finally, SCO has asserted a claim against IBM for unfair competition (Count VI). The crux of this claim is that IBM exceeded the scope of its license to certain SVr4 code (licensed to IBM by The Santa Cruz Operation during Project Monterey) by copying the code into IBM's AIX for POWER product. SCO failed to provide the detailed disclosures required by the Court with respect to any allegedly misused code not subject to copyrights owned by Novell. SCO cannot pursue a claim for unfair competition with respect to code in which another party owns the copyrights and has the panoply of rights associated with copyright ownership. To the extent SCO's unfair competition claim challenges the conduct underlying SCO's contract, copyright and tortious interference claims, it is foreclosed by the Novell Decision for the same reasons that SCO's other causes of action are foreclosed (discussed above).

Although the Court can decide IBM's summary judgment motion and dispose of SCO's unfair competition claim based on the Novell Decision alone, resolving issues not addressed by the Novell Decision would further develop the record and, we submit, result in alternative grounds for the Court's ruling, such as that SCO's claim is time barred, that it is preempted by the copyright law and that SCO cannot show damages.

Update: I've had a chance to study this a bit more. And it's a bit more complex. SCO is asking the court to allow two of IBM's motions asking for summary judgment on IBM's counterclaims to go forward, but none of the other SCO motions for summary judgment and none of the other IBM counterclaims. Just two of IBM's motions, with the argument that because the motions are based on IBM asking for summary judgment on SCO's claims, it is OK to go forward, because it's about SCO's claims, I guess. That's a bit more convoluted than saying SCO's claims can go forward but not IBM's except for two, which is what I saw it as being initially. But look at the list of the motions. SCO has none to pursue. Out of the 12 on the list, 6 are SCO's:
1. SCO’s Motion for Partial Summary Judgment on SCO’s Third Cause of Action, For Breach of Contract, dated September 25, 2006, Docket No. 775.

2. SCO’s Motion for Summary Judgment on IBM’s Second, Third, Fourth, and Fifth Counterclaims, dated September 25, 2006, Docket No. 776.

3. SCO’s Motion for Summary Judgment on IBM’s Sixth, Seventh, and Eighth Counterclaims, dated September 25, 2006, Docket No. 777.

10. SCO’s Motion for Reconsideration of the Order Overruling Objections to the Magistrate Court’s Granting of IBM’s Motion in Part to Limit Claims, dated December 13, 2006, Docket No. 897.

11. SCO’s Objections to Magistrate Court’s Order Denying SCO’s Motion for Relief for IBM’s Spoliation of Evidence, dated March 16, 2007, Docket No. 995.

12. SCO’s Objections to the Magistrate Court’s Order on IBM’s Motion to Confine, dated January 9, 2007, Docket No. 916.

The last three can't go forward in district court. SCO lost. It can appeal, but it didn't, so far as I know. [PJ: Correction. Numbers 10, 11, and 12 were not yet decided. If you want to see the latest, and try to unravel this ball of wax, here's an article that helps one to figure out where they were in the stream of filings when the bankruptcy interrupted the fun.] The first one on the list is obviously not a motion untouched by the rulings in the Novell litigation. It's a contract claim, front row and center. So all SCO has left of its own motions are motions on IBM's counterclaims. In that sense, it's picking out those two IBM motions as being motions that can be decided because they are about SCO's claims, not IBM's counterclaims. That's SCO's version of SCO going forward on its claims.

As you can see from reading SCO's Second Amended Complaint and the claims the motions are about, both these SCO motions left on the table if SCO gets its way do involve contractual rights, one more than the other, with SCO asserting that IBM overstepped the bounds of the license. But since Novell has waived that, even if it were true, which it isn't, I don't see how the Novell litigation leaves these two claims untouched.

But here's SCO's 2nd Amended Complaint, which it references, so you can see the claims they say these two motions are founded on, SCO's Sixth, Seventh, Eighth, and Ninth Causes of Action, and I think you'll be able to see the goal -- money -- and I've marked in red all the parts that I believe are affected by the Novell litigation:

SIXTH CAUSE OF ACTION

(Unfair Competition)

181. Plaintiff incorporates and re-alleges paragraphs No. 1-180, above.

182. Plaintiff and its predecessors have built the UNIX System V Technology, the Unix Software Code, SCO OpenServer, UnixWare and their derivatives through very substantial efforts over a time span in excess of 20 years and expenditure of money in excess of $1 billion.

183. IBM has engaged in a course of conduct that is intentionally and foreseeably calculated to undermine and/or destroy the economic value of UNIX anywhere and everywhere in the world, and to undermine and/or destroy plaintiff’s rights to fully exploit and benefit from its ownership rights in and to UNIX System V Technology, the Unix Software Code, SCO OpenServer, UnixWare and their derivatives, and thereby seize the value of UNIX System V Technology, the Unix Software Code, SCO OpenServer, UnixWare and their derivatives directly for its own benefit and indirectly for the benefit of its Linux distribution partners.

184. In furtherance of its scheme of unfair competition, IBM has engaged in the following conduct:

a) Misappropriation of source code, methods, trade secrets and confidential information of plaintiff;

b) Breach of contract;

c)Violation of confidentiality provisions running to the benefit of plaintiff;

d) Inducing and encouraging others to violate confidentiality provisions;

e)Contribution of protected source code and methods for incorporation into one or more Linux software releases, intended for transfer of ownership to the general public;

f) Use of deceptive means and practices in dealing with plaintiff with respect to its software development efforts; and

g) Other methods of unlawful and/or unfair competition.

185. IBM’s unfair competition has directly and/or proximately caused significant foreseeable and consequential harm to plaintiff in the following particulars:

a)Plaintiff’s revenue stream from UNIX licenses for Intel-based processing platforms has decreased substantially;

b) As Intel-based processors have now become the processing platform of choice for a rapidly-increasing customer base of enterprise software users, plaintiff has been deprived of the opportunity to fairly exploit its market-leading position for UNIX on Intel-based processors, which revenue opportunity would have been very substantial on a recurring, annual basis but for IBM’s unfairly competitive practices;

c)Plaintiff stands at imminent risk of being deprived of its entire stream of all UNIX licensing revenue in the foreseeably near future;

d) Plaintiff has been deprived of the effective ability to market and sell its new UNIX-related improvements, including a 32-bit version of UNIX for Intel processors developed prior to Project Monterey, and its new web-based UNIX-related products, including UNIX System V Release 6;

e)Plaintiff has been deprived of the effective revenue licensing opportunity to transfer its existing UNIX System V Release 4 and Release 5 customer base to UNIX System V Release 6; and

f) Plaintiff has been deprived of the effective ability to otherwise fully and fairly exploit UNIX’s market-leading position in enterprise software market, which deprivation is highly significant given the inability of Microsoft Windows to properly support large-scale enterprise applications.

186. As a result of IBM’s unfair competition and the marketplace injury sustained by plaintiff as set forth above, plaintiff has suffered damages in an amount to be proven at trial, but no less than $1 billion, together with additional damages through and after the time of trial foreseeably and consequentially resulting from IBM’s unfair competition in an amount to be proven at the time of trial.

188.[sic] IBM’s unfairly competitive conduct was also intentionally and maliciously designed to destroy plaintiff’s business livelihood and all opportunities of plaintiff to derive value from its UNIX-based assets in the marketplace. As such, IBM’s wrongful acts and course of conduct has created a profoundly adverse effect on UNIX business worldwide. As such, this Court should impose an award of punitive damages against IBM in an amount to be proven and supported at trial.

SEVENTH CAUSE OF ACTION

(Interference with Contract)

187 [sic]. Plaintiff incorporates and re-alleges by reference paragraphs 1-186, [sic]above.

188.[sic] SCO has contracts with customers around the world for licensing of SCO OpenServer and UnixWare.

189.[sic] IBM knew and should have known of these corporate software licensing agreements between SCO and its customers, including the fact that such agreements contain confidentiality provisions and provisions limiting use of the licensed object-based code.

190.[sic] IBM, directly and through its Linux distribution partners, has intentionally and without justification induced SCO’s customers and licensees to breach their corporate licensing agreements, including but not limited to, inducing the customers to reverse engineer, decompile, translate, create derivative works, modify or otherwise use the UNIX software in ways in violation of the license agreements. These customers include Sherwin Williams, Auto Zone, among others.

191.[sic] IBM’s tortious interference has directly and/or proximately caused significant foreseeable damages to SCO, including a substantial loss of revenues.

192[sic]. IBM’s tortious conduct was also intentionally and maliciously designed to destroy plaintiff’s business livelihood and all opportunities of plaintiff to derive value from its UNIX-based assets in the marketplace. As such, this Court should impose an award of punitive damages against IBM in an amount to be proven and supported at trial.

EIGHTH CAUSE OF ACTION

(Interference with Contract)

193.[sic] Plaintiff incorporates and re-alleges paragraphs No. 1-192,[sic] above.

194.[sic] Through an Asset Purchase Agreement dated September 19, 1995, as amended ("Asset Purchase Agreement," attached hereto with amendments as Exhibit "V") wherein Novell received 6.1 million shares of SCO common stock, valued at the time at over $100 million in consideration, SCO, through its predecessor in interest, acquired from Novell all right, title and interest in and to the UNIX and UnixWare business, operating system, source code, and all copyrights related thereto, as well as all claims arising after the closing date against any parties relating to any right, property, or asset included in the business.

195.[sic] Schedule 1.1(a) to the Asset Purchase Agreement provides that SCO, through its predecessor in interest, acquired from Novell:

I. All rights and ownership of UNIX and UnixWare, including but not limited to all versions of UNIX and UnixWare and copies of UNIX and UnixWare (including revisions and updates in process), and all technical, design, development, installation, operation and maintenance information concerning UNIX and UnixWare, including source code, source documentation, source listings and annotations, appropriate engineering notebooks, test data and results, as well as all reference manuals and support materials normally distributed by [Novell] to end-users and potential end-users in connection with the distribution of UNIX and UnixWare . . .

II. All of [Novell's] claims arising after the Closing Date against any parties relating to any right, property or asset included in the Business.

196. In Amendment No. 2 to the Asset Purchase Agreement, Novell and SCO made clear that SCO owned all "copyrights and trademarks owned by Novell as of the date of the [Asset Purchase Agreement] required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies," and that Novell would not longer be liable should any third party bring a claim against SCO "pertaining to said copyrights and trademarks." (Exh. V, Amendment No. 2 to the Asset Purchase Agreement dated October 16, 1996 at I).

197. IBM is well aware of the terms of the Asset Purchase Agreement and the obligations Novell owes to SCO pursuant to the Asset Purchase Agreement. Indeed, IBM expressly acknowledged the existence of the Asset Purchase Agreement when it executed Amendment X, attached hereto as Exhibit E.

198.[sic] After suit against IBM was filed, and more than seven years after the Asset Purchase Agreement was executed by Novell, IBM intentionally and improperly interfered with the Asset Purchase Agreement.

199.[sic] Specifically, commencing on or about May 2003, Novell began falsely claiming that Novell, not SCO, owned the copyrights relating to UNIX System V. On information and belief, IBM had induced or otherwise caused Novell to take the position that Novell owned the copyrights -- a position that is flatly contradicted by the Asset Purchase Agreement. Since that time, Novell has improperly registered the same copyrights that it sold to SCO and that SCO had previously registered.

200.[sic] In addition, IBM intentionally and improperly interfered with the Asset Purchase Agreement by inducing or otherwise causing Novell to violate the Asset Purchase Agreement by claiming Novell could waive and was waiving breaches of license agreements by various licensees, including IBM. Specifically, with the IBM Termination Date looming only days away, Novell wrote to SCO claiming that either SCO must waive its right to terminate IBM's license based upon IBM's numerous breaches thereof or else Novell would purportedly waive SCO's right to terminate the license and otherwise excuse IBM's numerous breaches of the license agreements.

201.[sic] Again, Novell's position, improperly encouraged and induced by IBM, is flatly contrary to the terms of the Asset Purchase Agreement.

202.[sic] Under the Asset Purchase Agreement, Novell merely retained an interest in receiving future royalties from System V licensees. SCO, conversely, obtained "all of Sellers' right, title and interest in and to the assets and properties of the seller relating to the Business (collectively the "Assets") identified on Schedule 1.1(a) hereto." The Assets identified on Schedule 1.1(a) include "all rights and ownership of Unix and UnixWare," including source code, software and sublicensing agreements and "all claims against any parties relating to any right or asset included in the business."

203.[sic] Thus, SCO acquired all of Novell's right, title and interest: (a) to the AT&T software and sublicensing agreements, including the IBM Related Agreements and Sequent Agreements, and (b) to all claims against any parties.

204.[sic] As a beneficiary of the royalties, Novell can modify or waive the royalty amounts due under a license agreement. However, at IBM's improper urging and inducement, Novell now claims that it can amend, modify or waive any and all terms of the software and sublicensing agreements. Thus, according to Novell's position prompted by IBM, if a licensing such as IBM is egregiously breaching its agreement and thereby destroying the value of System V, Novell claims that it can waive any such breach of the agreement. Such position, of course, is unfounded and preposterous; otherwise, the over $100 million dollars paid for the software and sublicensing agreements was for naught if Novell retained all rights to waive any breach by a licensee. Of course, Novell could not sell all right, title and interest to the AT&T software and sublicensing agreements and the rights to all claims against third parties, only to have Novell also claim it can waive those rights. While Novell may be able to modify or waive the royalties to which Novell was entitled, Novell cannot waive rights it clearly unequivocally sold to SCO (i.e. the software and sublicensing agreements, including all the restrictive covenants, and all claims against any parties relating to those agreements.) Novell nonetheless has attempted to do so at IBM's improper direction.

205. Since improperly inducing Novell to breach the Asset Purchase Agreement by falsely claiming copyright ownership of System V (and subsequently registering those copyrights after SCO had registered them) and since improperly inducing Novell to attempt to breach the Asset Purchase Agreement by purporting to waive SCO's rights under the Asset Purchase Agreement, IBM has contributed $50 million dollars to Novell so that Novell can complete the purchase of SuSE, the largest Linux distributor in Europe.

206. IBM's tortious interference has directly and/or proximately caused significant forseeable damages to SCO.

207. IBM's tortious conduct was also intentionally and maliciously designed to destroy plaintiff's business livelihood and all opportunities of plaintiff to derive value from its Unix based assets in the marketplace. As such, this Court should impose and award punitive damages against IBM in an amount to be proved and supported at trial.

NINTH CAUSE OF ACTION

(Interference with Business Relationships)

208. Plaintiff incorporates and re-alleges by reference paragraphs 1-207, above.

209. SCO had existing or potential economic relationships with a variety of companies in the computer industry, including but not limited to Hewlett Packard.

210. IBM has intentionally interfered with plaintiff's existing or potential economic relations. For example, at Linux World in January, 2003 IBM representatives contacted various companies with whom SCO had existing or potential economic relations. These IBM representatives said that IBM was discontinuing doing business with SCO and that these other companies, some of whom are business partners with IBM, also should discontinue doing business with SCO.

211. IBM, as the world's largest information technology company, as well as the world's largest business and technology services provider ($36 billion), and the world's largest IT financier ($35 billion in assets), has considerable clout with these companies that it told to stop doing business with SCO.

212. IBM's intentional interference was for an improper purpose and/or by improper means.

213. IBM's intentional interference has directly and/or proximately caused significant forseeable damages to SCO.

214. IBM's tortious conduct was also intentionally and maliciously designed to destroy plaintiff's business livelihood. As such, this Court should impose an award of punitive damages against IBM in an amount to be proved and supported at trial.

So only the 9th claim might conceivably be relatively untouched, although notice it was allegedly at LinuxWorld that the discussions SCO alleges occured, so even there, we see a Linux tie, and that in turn is predicated on the allegation that IBM was improperly trying to use Linux to destroy UNIX.

Which is funny, when you think of all the money IBM has made since on its own version of UNIX. But in any case, HP and others have denied the allegation, so I doubt this can go anywhere. Subtract the red parts and what is left? Which part is Novell unable to waive, one of the rights that Judge Stewart ruled it has. So it's more than puzzling that SCO thinks these claims are not affected by the rulings in the Novell litigation. All of SCO's claims are predicated on its central theme, that the contract didn't allow IBM to donate UNIX code, even its own home-grown code, to Linux. Once that is your starting point, the Novell rulings hit you in the face like a dead fish, because if SCO doesn't own the copyrights, it has no authority to speak. It did get the contract rights, but only over whatever transferred under the APA, and copyrights didn't. So there you are.

But here are the two IBM summary judgment motions SCO is willing to let go forward:

6. IBM’s Motion for Summary Judgment on SCO’s Unfair Competition Claim (SCO’s Sixth Cause of Action), dated September 25, 2006, Docket No. 782.

7. IBM’s Motion for Summary Judgment on SCO’s Interference Claims (SCO’s Seventh, Eighth, and Ninth Causes of Action), dated September 25, 2006, Docket No. 783.

But there are other IBM motions. Here they are, the ones SCO isn't asking to go forward:
4. IBM’s Motion for Summary Judgment on SCO’s Contract Claims (SCO’s First, Second, Third and Fourth Causes of Action), dated September 25, 2006, Docket No. 780.

5. IBM’s Motion for Summary Judgment on SCO’s Copyright Claims (SCO’s Fifth Cause of Action), dated September 25, 2006, Docket No. 781.

8. IBM’s Motion for Summary Judgment on Its Claim for Copyright Infringement (IBM’s Eighth Counterclaim), dated September 25, 2006, Docket No. 784.

9. IBM’s Motion for Summary Judgment on Its Claim for Declaratory Judgment of Non-Infringement (IBM’s Tenth Counterclaim), dated September 25, 2006, Docket No. 785.

So SCO would rather not meet up with the GPL in a court of law, I see. It wants a hold on the copyright claims, which are the ones where SCO will end up owing IBM a bucket full of money in damages. And hold the Lanham Act claims too. Lots of money in those claims, I think. Here are all the IBM counterclaims, if you want to track that (remembering that the patent counterclaims were dropped):
  • breach of contract (for "terminating" IBM's AIX license)

  • Lanham Act violation ("SCO has made material false representations regarding AIX, Dynix and IBM's Linux-related products and services, which affect a customer's decision whether to purchase these products and services. Specifically, SCO has publicly misrepresented the legitimacy of these products and services by falsely representing that IBM no longer has the right, authority and license to use, produce and distribute these products and by misrepresenting SCO's own rights in and to Unix, AIX, Dynix and Linux.")

  • unfair competition ("SCO has engaged in unfair competition by falsely claiming ownership of IBM's intellectual property as well as the intellectual property created by the open-source community; publishing false and disparaging statements about AIX and Dynix; making bad faith misrepresentations concerning IBM's rights to Unix, MX and Dynix; misusing and misrepresenting SCO's limited rights in Unix to injure IBM; and falsely accusing IBM of theft of SCO's intellectual property.")

  • intentional interference with prospective economic relations ("SCO has intentionally interfered with these relationships through improper means, including by making false and misleading statements to IBM's prospective customers that IBM no longer has the right, authority and license to use, produce and distribute AIX, Dynix and Linux-related products. SCO has also misrepresented its own rights relating to these operating systems.")

  • unfair and deceptive trade practices ("SCO has engaged in unfair and deceptive trade practices by, among other things, falsely representing that IBM no longer has the right, authority and/or license to use, produce and/or distribute AIX, Dynix and Linux-related products; misrepresenting SCO's and IBM's rights relating to these operating systems; and publishing false and disparaging statements about AIX, Dynix and Linux.")

  • breach of the GPL ("SCO has breached the GPL by, among other things, copying, modifying, sublicensing or distributing programs licensed under the GPL, including IBM contributions, on terms inconsistent with those set out in the GPL; and seeking to impose additional restrictions on the recipients of programs licensed under the GPL, including IBM contributions, distributed by SCO." That would be SCOsource, for one, but also: "The GPL prohibits SCO from, among other things, asserting certain proprietary rights over, or attempting to restrict further distribution of any program distributed by SCO under the terms of the GPL, except as permitted by the GPL." So it's also about SCO's claim that the code isn't allowed to be in Linux.)

  • promissory estoppel (because SCO distributed under the GPL the code it is suing about and complaining about, and IBM relied on that license and SCO's promises under it.)

  • copyright infringement (for "copying, modifying, sublicensing and/or distributing Linux products except as expressly provided under the GPL". Ah, SCOsource. The chickens will come home to roost, right on your head.
SCO was a bad boy, and it has a lot to answer for. I think you can see that the rulings in the Novell litigation that the UNIX and UnixWare copyrights didn't transfer to them under the APA, with or without Amendment 2, makes all of the IBM motions on its counterclaims a no-brainer to decide. Of course, SCO would like to avoid all that, or at least postpone it until it has no money left at all or until, in SCO's dreams, it overturns all its unhappy losses in appeals and can hustle up some money, honey.

But the odd thing is, SCO is asking to go forward on the two IBM motions because it didn't file any motion for summary judgment on its own claims, on its 6th, 7th, 8th and 9th causes of action. Only IBM did. How truly odd is that?

SCO believes that the IBM summary judgment motions designated Docket Nos. 782 and 783 do not depend on the outcome of the Novell Litigation and are not stayed because they are directed at SCO’s claims for Unfair Competition and Tortious Interference (the Sixth, Seventh, Eighth, and Ninth Causes of Action in SCO’s Second Amended Complaint). SCO thus respectfully requests the Court to rule on those and possibly other motions so that SCO may pursue those claims
See what I mean? How is it SCO pursuing claims when it's IBM that would be pursuing its own motions? Unless you assume that IBM could lose the motions, thus freeing SCO up.... I don't know what SCO is thinking. I guess they went down the list and found no other hope. So its position is it wants to go forward on these four claims, and nothing else, and the only way to go forward, I guess SCO thinks, is to resolve the two IBM motions in SCO's favor, then go to trial with those claims, while everything else stays frozen until after SCO wins its appeal. I'm trying to think like SCO, and SCO always posits that it will win, but it's so hard to think like SCO, it took a while to parse this all out. But I think I've got it straight at last. Not that SCO is ever straight.

Update 2: I believe this is a typo on SCO's part:

Based on the position IBM took in its status report after the Novell summary judgment rulings that were subsequently reversed, SCO expects that IBM will argue that the Novell Final Judgment, if affirmed, resolves all claims against SCO...
It should read "all claims against IBM." See what happens when you get so clever that not even you can follow the trail?

Here's the new motion as text, leaving off the certificate of service, for speed:

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

Brent O. Hatch (5715) [email]
Mark James (5295)[email]
HATCH, JAMES & DODGE, PC
[address]
[phone]
[fax]

David Boies (admitted pro hac vice) [email]
Robert Silver (admitted pro hac vice) [email]
Edward Normand (admitted pro hac vice) [email]
BOIES, SCHILLER & FLEXNER LLP
[address]
[phone]
[fax]

Stuart Singer (admitted pro hac vice) [email]
BOIES, SCHILLER & FLEXNER LLP
[address]
[phone]
[fax]

Attorneys for Plaintiff, The SCO Group, Inc.

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH

THE SCO GROUP, INC., by and through the
Chapter 11 Trustee in Bankruptcy, Edward N. Cahn,

Plaintiff/Counterclaim-Defendant,

v.

INTERNATIONAL BUSINESS
MACHINES CORPORATION,

Defendant/Counterclaim-Plaintiff.
MOTION FOR A STATUS CONFERENCE

Civil No.: 2:03CV0294

Honorable Tena Campbell

Plaintiff/Counterclaim-Defendant, The SCO Group, Inc. (“SCO”) respectfully submits this Motion for a Status Conference to apprise the Court of the Final Judgment Judge Ted Stewart recently entered in the SCO v. Novell case (Civil No. 2:04CV139) (the “Novell Litigation”), and to request a status conference for the Court to consider the appropriate time and manner to proceed with un-stayed claims in the instant action that are not affected by the Novell Litigation.

I. BACKGROUND

In March 2003, SCO brought this action, asserting various claims based on its ownership of the UNIX computer operating system and of the contracts pursuant to which IBM and other computer makers obtained licenses to use UNIX and develop their own derivative versions of the operating system. Starting in May 2003, Novell published statements claiming ownership of the UNIX copyrights and unfettered authority to waive SCO’s rights under those contracts. In January 2004, SCO instituted the Novell Litigation, seeking to protect its copyrights and contractual rights in UNIX. The instant action and the Novell Litigation then proceeded on parallel tracks before Judge Dale Kimball in this district court.

On August 10, 2007, while the previously filed motions for summary judgment by both parties were pending in this action, Judge Kimball granted Novell motions for summary judgment in the Novell Litigation, ruling that Novell (1) owns the copyrights to pre-1996 UNIX technology because Novell had not transferred the existing UNIX copyrights pursuant to the Asset Purchase Agreement (the “APA”) under which Novell had otherwise sold the UNIX business and source code to SCO’s predecessor-in-interest in 1995, and (2) has unfettered authority to waive SCO’s rights in its UNIX license agreements with IBM and others. Upon an order by Judge Kimball, on August 31, 2007, SCO and IBM filed status reports informing Judge Kimball of their respective views of the effect of the Novell summary judgment rulings upon the claims, counterclaims, and pending summary judgment motions in this case. (Docket Nos. 1077, 1078, 1079.)

On September 14, 2007, in light of Judge Kimball’s summary judgment rulings in the Novell Litigation, SCO filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware. On that same date, SCO also filed a Notice of Filing for Bankruptcy, informing Judge Kimball of SCO’s bankruptcy petition and the automatic stay of any judicial proceedings against SCO pursuant to the Bankruptcy Statute. (Docket No. 1080.) On September 20, 2007, acknowledging “the automatic stay imposed by 11 U.S.C. § 362(a)(1),” Judge Kimball ordered the temporary administrative closure of this action. (Docket No. 1081.)

On August 24, 2009, the Tenth Circuit Court of Appeals reversed Judge Kimball’s summary judgment rulings in the Novell Litigation in pertinent part and remanded the Novell Litigation for trial. Upon the remand, Judge Kimball recused himself from both the Novell Litigation and the instant action (Docket No. 1086), and the cases were then assigned to Judge Stewart and this Court, respectively.

On March 30, 2010, a jury in the Novell Litigation returned a verdict for Novell, finding that Novell owns the copyrights to pre-APA UNIX technology. On June 10, 2010, Judge Stewart issued Findings of Facts and Conclusions of Law also in favor of Novell, concluding that SCO is not entitled to specific performance requiring Novell to transfer the pre-APA copyrights now, and that Novell has the unfettered authority to waive SCO’s rights in its UNIX contracts with IBM and others. On June 10, 2010, Judge Stewart also issued a Final Judgment embodying the jury verdict and his findings of fact and conclusions of law. On July 7, 2010, SCO filed an appeal of the Novell Final Judgment and the decisions embodied therein in the Tenth Circuit Court of Appeals.

II. REQUEST

While Judge Kimball issued an order administratively closing the entire case during the pendency of the statutory stay, the stay applies only to proceedings against SCO, and not to SCO’s

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claims against IBM and others. SCO thus submits that it would be proper and efficient for the Court now to resolve the pending motions that could allow SCO to pursue claims that are not dependent on the outcome of the Novell Litigation. The summary judgment motions and other applications pending in this case include the following:

1. SCO’s Motion for Partial Summary Judgment on SCO’s Third Cause of Action, For Breach of Contract, dated September 25, 2006, Docket No. 775.

2. SCO’s Motion for Summary Judgment on IBM’s Second, Third, Fourth, and Fifth Counterclaims, dated September 25, 2006, Docket No. 776.

3. SCO’s Motion for Summary Judgment on IBM’s Sixth, Seventh, and Eighth Counterclaims, dated September 25, 2006, Docket No. 777.

4. IBM’s Motion for Summary Judgment on SCO’s Contract Claims (SCO’s First, Second, Third and Fourth Causes of Action), dated September 25, 2006, Docket No. 780.

5. IBM’s Motion for Summary Judgment on SCO’s Copyright Claims (SCO’s Fifth Cause of Action), dated September 25, 2006, Docket No. 781.

6. IBM’s Motion for Summary Judgment on SCO’s Unfair Competition Claim (SCO’s Sixth Cause of Action), dated September 25, 2006, Docket No. 782.

7. IBM’s Motion for Summary Judgment on SCO’s Interference Claims (SCO’s Seventh, Eighth, and Ninth Causes of Action), dated September 25, 2006, Docket No. 783.

8. IBM’s Motion for Summary Judgment on Its Claim for Copyright Infringement (IBM’s Eighth Counterclaim), dated September 25, 2006, Docket No. 784.

9. IBM’s Motion for Summary Judgment on Its Claim for Declaratory Judgment of Non-Infringement (IBM’s Tenth Counterclaim), dated September 25, 2006, Docket No. 785.

10. SCO’s Motion for Reconsideration of the Order Overruling Objections to the Magistrate Court’s Granting of IBM’s Motion in Part to Limit Claims, dated December 13, 2006, Docket No. 897.

11. SCO’s Objections to Magistrate Court’s Order Denying SCO’s Motion for Relief for IBM’s Spoliation of Evidence, dated March 16, 2007, Docket No. 995.

12. SCO’s Objections to the Magistrate Court’s Order on IBM’s Motion to Confine, dated January 9, 2007, Docket No. 916.

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SCO believes that the IBM summary judgment motions designated Docket Nos. 782 and 783 do not depend on the outcome of the Novell Litigation and are not stayed because they are directed at SCO’s claims for Unfair Competition and Tortious Interference (the Sixth, Seventh, Eighth, and Ninth Causes of Action in SCO’s Second Amended Complaint). SCO thus respectfully requests the Court to rule on those and possibly other motions so that SCO may pursue those claims.

Based on the position IBM took in its status report after the Novell summary judgment rulings that were subsequently reversed, SCO expects that IBM will argue that the Novell Final Judgment, if affirmed, resolves all claims against SCO, including its Unfair Competition and Tortious Interference Claims. (See IBM’s Memorandum in Response to the Court’s Order of August 10, 2007, at 3-4 (Docket No. 1078) (arguing that the Novell summary judgment decision “foreclosed” these claims).) Given the likely dispute over the effect of the Novell Litigation, the complexity of the claims and pending motions in this action, and the possible dispute over the scope of the bankruptcy stay, SCO respectfully submits that the Court and the parties will be best served by holding a status conference for the Court to consider a schedule for hearings on motions and for a trial in this matter.

DATED this 30th day of July, 2010.

By: /s/ Brent O. Hatch
HATCH, JAMES & DODGE, P.C.
Brent O. Hatch
Mark F. James

BOIES, SCHILLER & FLEXNER LLP
David Boies
Robert Silver
Stuart H. Singer
Edward Normand

Counsel for The SCO Group, Inc.

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