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SCO Replies to IBM on Motion for Reconsideration: Skip Briefing. Let's Go to Trial Quickly. We're Running Out of Money ~ pj
Tuesday, June 11 2013 @ 04:43 AM EDT

SCO has filed its reply to IBM's response to SCO's motion asking the judge to reconsider his refusal of SCO's motion to reopen SCO v. IBM.

It will not surprise you that SCO doesn't like IBM's suggestions on how the case should go forward. IBM suggested a couple of rounds of a process, first tossing out whatever both sides agree are mooted claims, due to the Novell victory over SCO, then IBM would bring a summary judgment motion on the rest, and that would require briefing, IBM suggested, because there are new cases decided in the interim that are relevant.

SCO's argument in opposition goes like this, its list of three reasons it thinks IBM's proposal of further briefing and the summary judgement motion is improper -- 1) the parties already briefed the court on the effect of the Novell judgment, so just look it up; 2) if there are new cases, let IBM file a notice of supplemental authorities; and 3) SCO can't afford to wait while all that briefing goes on. Its cash supply is such, it's now or never. It wants a quick ruling on the pending 5-year-old motions, and then it wants a trial on whatever claims survive. Ah. A trial. The perpetual dream that it can get a jury to see it SCO's way. This case is its final asset, SCO whines, so the Court, it argues, "should proceed to adjudicate the pending summary judgment motions without the need for the improper rounds of additional briefing that IBM proposes."

However, judges don't decide matters based on how long one side can hold out. If the judge thinks IBM's proposal makes further briefing the way to go, it will happen. You are supposed to plan appropriately when you initiate litigation.

SCO complains of delay in the case, but the delay was caused entirely by SCO, who filed for bankruptcy and then just floated around on its back a leisurely long while in the pool, as all its money flowed out in rivers to lawyers, accountants, and other "helpers" for years, while it pretended to reorganize, which in the end never happened, as indeed was predictable from the start. Meanwhile, IBM was blocked by law from going forward. Hence the "delay". So the judge's heart strings may not be touched in quite the way SCO hopes by its tale of prejudice if there is a delay.

If one deliberately shoots oneself in the foot, complaining about pain in one's foot may cause onlookers to suggest not shooting oneself in the foot next time.

The filing, first, so you can follow along:

06/10/2013 - 1114 - REPLY to Response to Motion re 1110 MOTION for Reconsideration of the Court's Order Denying Motion to Reopen the Case re 1109 Order on Motion to Reopen Case, Order on Motion for Hearing, Memorandum Decision filed by Plaintiff SCO Group. (Hatch, Brent) (Entered: 06/10/2013)

Here's the odd thing. Back when SCO first asked to reopen the case alone, without IBM being allowed to pursue any of its claims, in 2011, it was fine with further briefing. That was when it said it had two claims remaining after the Novell judgment, the claims about Project Monterey and its tortious interference claims, and it said "SCO is prepared to provide such additional briefing or oral argument as the Court may find helpful, especially in light of the Novell Final Judgment." Now, when IBM says OK, let's do that, SCO isn't willing or, apparently prepared, to do what it said it was fine with in 2011.

Maybe it's the money. But Boies Schiller is on the hook to represent SCO for free all the way through the US Supreme Court, if it ever were to accept the case someday, so I can't see why SCO can't afford it. Maybe its lawyers would rather hurry. They're in the red on this case, they've claimed. Or maybe it's that this time, unlike SCO's failed scheme in 2011, *IBM* gets to bring summary judgment motions, not just SCO, and the last thing SCO wants is a judge ruling on these claims. It wants a jury too stupid to follow SCO's moves, hence unable to figure out under which paper cup the pea ends up.

Anyway, if you are interested in exactly what SCO hopes to prove at any future trial, here's the tortious interference claim from that 2011 filing:

The Tortious Interference Claims allege that IBM interfered with SCO's position as the leader in the UNIX-on-Intel market by wrongfully disclosing confidential UNIX technologies to Linux, in order to transform Linux from an upstart operating system for hobbyists to a commercial-grade alternative to SCO's UnixWare and OpenServer operating systems -- thereby interfering with SCO's existing customers and prospective business opportunities. These Claims also allege that IBM pressured and encouraged SCO partners and customers to terminate or reduce their relationships with SCO, when SCO pursued remedies for the misappropriation of confidential UNIX technologies into Linux.
Sigh. They never learn. They never accept defeat. They never stop. They never give up attacking Linux, by hook and by crook, shall we say. What do they want? Some of IBM's money. Period. But IBM has counterclaims to burn. The odds of SCO getting anything at all, net, are so small, I can't believe they are even bringing this motion. But then, SCO is SCO. I should be used to them by now.

Here it is, as text, SCO's filing, minus the list of lawyers at the top of page one, just for time -- it's the usual suspects, particularly Brent Hatch, Stuart Singer, Edward Normand, and David Boies plus Mark James, Robert Silver, Jason Cyrulnik, and Mauricio A. Gonzalez. Cyrulnik worked on SCO's losing case against Novell at trial. This is the first time I've seen him on the SCO v. IBM team. Here's how his bio at Boies Schiller frames it, in the list of cases he's handled:

Representing a software manufacturer in litigation in federal court against two large computer companies concerning the development of the Linux operating system and the ownership of UNIX copyrights. Co-lead attorney in two-week bench trial and three-week jury trial.
They left off -- he lost. He lost big time. And they left off SCO's name. Is that because it's not really a badge of honor to represent SCO? No. Lawyers often don't list the names of clients on the firm web site. But he's not representing SCO against *two* companies, unless the court reopens the case against IBM, except in filed documents. We haven't seen him listed at any rate, until SCO started asking recently to reopen the IBM case. He did attend at least one bankruptcy hearing, though, and heaven only knows SCO stiffed IBM there with ease, so maybe that's what he means, not that helping SCO do that is much of a recommendation in my book. The huge footnote #1 lists various filings, and you can find them all, by number, on this page:

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

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,

vs.

INTERNATIONAL BUSINESS
MACHINES CORPORATION,

Defendant/Counterclaim-Plaintiff.

_________________

THE SCO GROUP, INC.’S REPLY MEMORANDUM IN SUPPORT OF MOTION FOR RECONSIDERATION OF
THE COURT’S ORDER DENYING
MOTION TO REOPEN THE CASE

Civil No.: 2:03-CV-00294-DN

Honorable David Nuffer

INTRODUCTION

Plaintiff-Counterclaim-Defendant, The SCO Group, Inc. (“SCO”) respectfully submits this Reply Memorandum in support of its Motion for Reconsideration of the Court’s Order Denying SCO’s Motion to Reopen the Case (the “Motion for Reconsideration”).

In its response to the Motion for Reconsideration, IBM concedes (at 1) that it “does not oppose reopening this case,” without disputing that it previously agreed to and even called for the reopening of the case upon the lifting of the bankruptcy stay. Accordingly, upon the Court’s reconsideration, the Motion to Reopen the Case should be granted without further delay.

IBM nevertheless devotes almost the entirety of its response to the unprecedented proposal that the Court order two additional rounds of summary judgment briefing predicate to the resolution of the summary judgment motions that have been pending in this case since 2006. This Reply Memorandum responds to that proposal.

ARGUMENT

IBM first requests (at 1) an order permitting it “to make a motion for summary judgment addressing the impact of the Novell Judgment on all remaining claims (including IBM’s counterclaims).” In addition, IBM requests (at 2) a possible second order requiring the parties to “supplement existing briefing” and provide “additional argument” on the pending summary judgment motions. As to the rationale for this request, IBM explains: “Not only does the Novell Judgment affect these claims in important respects, but also the pending motions were filed nearly five years ago and the body of relevant case law has grown.” IBM’s proposal is improper, and should be denied, for at least three reasons.

2

First, in their pending summary judgment motions, the parties already briefed and argued the effect of the Novell Litigation on this case.1 The rounds of additional motions that IBM proposes thus amount to additional bites at the apple for which there is no authority or precedent. SCO submits that, following proper procedure, the Court should adjudicate the pending motions related to SCO’s claims and IBM’s counterclaims without further delay, relying on the Novell Judgment as the basis for the Court’s decisions where relevant and appropriate. SCO has acknowledged that a number of its claims were resolved by the Novell Judgment and that those claims can be dismissed.2 To the extent the Court deems it helpful to see a self-contained summary of the effect of the Novell Litigation, both IBM and SCO already provided that information in their briefs for the underlying Motion to Reopen the Case. There is no reason why any remaining dispute about the scope of the Novell Judgment cannot be addressed in the context of the pending summary judgment motions or the trial of surviving claims.

Second, the possibility that new authorities may exist does not remotely warrant re-litigation of the same issues. If IBM knows of such authorities, it could have filed a notice of

3

supplemental authorities—the accepted procedure for bringing additional pertinent authority to the court’s attention.

Third, the further delay that IBM proposes would work extreme prejudice upon SCO and its constituents. SCO received Chapter 11 bankruptcy protection in September 2007, and as a result of the diminution of its business and assets, was converted to Chapter 7 in August 2012. Currently, SCO’s claims against IBM in this case are the estate’s only remaining assets. Because of the routine costs associated with bankruptcy, every month that SCO remains in bankruptcy further erodes its extremely limited cash reserves and thus its capacity to pursue its only remaining assets.

IBM’s proposal would be especially prejudicial in light of the delay that has already occurred. This case has been pending since March 2003. On June 14, 2012, SCO notified the Court of the lifting of the bankruptcy stay. IBM agreed to the reopening of the case. In this context, IBM’s proposal to further delay the case would work unfair prejudice upon SCO.

Finally, given the prejudice that the passage of time will continue to work upon the bankruptcy estate, SCO submits that it would also be appropriate for the Court to set the case for mediation on a parallel track, to determine whether the case can now be settled in light of the Novell rulings.

CONCLUSION

IBM’s proposal calls for further, unnecessary, and improper delay to the resolution of a case that has been pending for over a decade. In submitting hundreds of pages of summary judgment papers, IBM had ample opportunity to argue the effect that a favorable resolution of the Novell Litigation would have on this case. IBM took full advantage of that opportunity. The

4

Court, therefore, should proceed to adjudicate the pending summary judgment motions without the need for the improper rounds of additional briefing that IBM proposes.

For the foregoing reasons, SCO respectfully asks the Court to grant the Motion for Reconsideration, reopen this case, and proceed with the adjudication of relevant pending motions.

DATED this 10th day of June, 2013.

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
Jason Cyrulnik
Mauricio A. Gonzalez

Counsel for The SCO Group, Inc.

_________
1 E.g., IBM’s Memorandum in Support of Its Motion for Summary Judgment on SCO’s Contract Claims (Docket No. 802) at 4, 41-43, 53-57, 104-06 (arguing Novell’s ownership of the waiver rights disputed in the Novell Litigation forecloses SCO’s contract claims); IBM’s Memorandum in Support of Its Motion for Summary Judgment on SCO’s Copyright Claim (Docket No. 807) at 76-77 (arguing Novell’s ownership of the copyrights disputed in the Novell Litigation forecloses SCO’s copyright claim); IBM’s Memorandum in Support of Its Motion for Summary Judgment on SCO’s Interference Claims (Docket No. 803) at 27-29 (arguing Novell’s ownership of the waiver rights disputed in the Novell Litigation forecloses SCO’s interference claim alleging that IBM induced Novell to breach the APA); IBM’s Memorandum in Support of Its Motion for Summary Judgment on SCO’s Unfair Competition Claim (Docket No. 806) at 1 (incorporating foregoing briefs and others by reference in opposing SCO’s unfair competition claims not based on Project Monterey); IBM’s Memorandum in Support of Its Motion for Summary Judgment on Its Tenth Counterclaim (Docket No. 805) at 13, 71-72, 76-77 (arguing IBM is entitled to summary judgment on its Tenth Counterclaim based on Novell’s ownership of the copyrights disputed in the Novell Litigation).

2 SCO’s Memorandum in Support of Its Motion to Reopen the Case (Docket No. 1108) at 1.

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