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IBM's Objections and Corrections to SCO's "Proposed Partial Judgment" ~pj
Friday, June 28 2013 @ 08:13 PM EDT

IBM has filed on time its objections [PDF] to SCO's Statement in Compliance with the Court's Order Reopening the Case.

The Hon. David Nuffer, now presiding over this farce SCO insists on playing out, ordered SCO to file a list of which of its claims, if any, it believes survived SCO's massive loss to Novell. And it did file, but IBM noticed that SCO attached to its Statement a proposed judgment [PDF] for the judge to sign, trickily titled "Proposed Judgment Dismissing SCO's Claims Mooted by the Final Judgment in SCO v. Novell."

And 'mooted', IBM points out, is hardly the right word.

IBM calmly and cooly presents the court with an alternative version [PDF] of a proposed judgment correcting that and other SCO errors, pointing out SCO isn't named SCO any more, for one thing, and that these claims are not *mooted* -- they were decided on their merits and it would like that wording fixed so SCO doesn't get to sue IBM over them ever again.

I totally missed that sneaky title, but IBM's lawyers at Cravath, Swaine & Moore miss absolutely nothing.

IBM doesn't mind if SCO dismisses Counts I-V, VIII, and SCO's copyright infringement claims, with prejudice, as SCO proposes, IBM tells the court, and it also doesn't object to SCO dismissing certain parts of Count VI with prejudice. But it absolutely does object to dismissing any claims as allegedly moot, because "they are barred under principles of issue preclusion (or collateral estoppel)." The Novell case decided certain elements of these SCO claims on the merits, IBM points out, and "SCO is precluded from relitigating them against IBM." Here's what issue preclusion means. And here's what collateral estoppel means. They both mean that SCO can't hide behind a tree and then leap out and tackle IBM again until the end of time. As in never.

And as for SCO's claim that the Novell judgment "has no bearing" on Count VII, IX and part of the Project Monterey claim, IBM disagrees and will file a summary judgment motion shortly. And that's not all.

The filings:

06/28/2013 - 1120 - RESPONSE re 1119 Notice of Filing,, filed by International Business Machines Corporation. (Attachments: # 1 Exhibit A - Proposed Judgment (Clean), # 2 Exhibit B - Proposed Judgment (Blackline), # 3 Exhibit C - Delaware Dkt. No. 1291, # 4 Exhibit D - Delaware Dkt. No. 1439)(Sorenson, Amy) (Entered: 06/28/2013)

IBM also objects to SCO calling Project Monterey a "joint venture". The agreement [PDF] clearly states that it was not a joint venture. You can see that by reading Section 22.5, which says the parties were independent contractors: "Each party is acting solely as an independent company. This Agreement shall not be construed to establish any form of partnership, agency, franchise or joint venture of any kind between SCO and IBM..." (See page 55 of the PDF, 34 of the agreement.) The agreement was with the Santa Cruz Operation, the original SCO, not this Brand-X-Caldera-retitled-SCO-and-now-TSG, I'll mention for anyone new around here.

And IBM also objects to SCO's proposal that each party should "bear its own fees and costs with regard to the dismissed claims":

As a "prevailing party", IBM is at least entitled to seek fees and costs under the Copyright Act.
"At least." Uh oh, SCO. Uh oh.

In my dreams, IBM asks for sanctions against the SCO and its lawyers.

At least.

IBM has more issues, it says, but it will lay them out in the forthcoming summary judgment motion the judge said it could file. As for SCO's name, SCO changed its name to "TSG Group, Inc." and its bankruptcy is now Chapter 7, not 11. For the court's convenience, it has attached "clean" and "blackline" versions of SCO's proposed partial judgment, amended appropriately, as Exhibits A and B.

SCO wanted to drink IBM's blood, and now here comes IBM with a silver bullet in one hand and a wooden stake in the other, in short. That's what I hear you need to kill vampires. IBM's been waiting a long, long time for justice. Now it's IBM's turn. You know what the Greeks say about vengeance, that it's best eaten cold, and IBM means to bring this foolishness to a clear and definite end. At last.

"Hello. My name is Inigo Montoya. You killed my father. Prepare to die."

The new title of the new proposed judgment, Exhibit A, from IBM's legal pen, is "[Proposed] Judgment Dismissing SCO's Claims". That's more like it. Here's the hilariously determined, albeit absolutely accurate, Exhibit A, the clean version, with all SCO's tricky bits removed (you can see the tricky bits in the blackline version, Exhibit B [PDF]):

[list of SCO's lawyers]

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH

___________

THE SCO GROUP,INC.,

Plaintiff/Counterclaim-Defendant,

VS.

INTERNATIONAL BUSINESS
MACHINES CORPORATION,

Defendant/Counterclaim-Plaintiff.

__________

[PROPOSED] JUDGMENT DISMISSING
SCO'S CLAIMS

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

Honorable David Nuffer

_________

Whereas plaintiff/counterclaim-defendant, The SCO Group, Inc. (n/k/a TSG Group, Inc.) ("SCO") brought a related action in this District Court, entitled SCO Group, Inc. v. Novell, Inc., Case No. 2:04-CV-129; and whereas, after the trial of that matter, Chief Judge Ted Stewart entered a final judgment ruling that Novell (1) owns the copyrights to pre-1996 UNIX source code, and (2) has the right to waive SCO's contract claims for breach of the licensing agreements pursuant to which IBM and others licensed pre-l996 UNIX source code (the "Novell judgment"); and whereas SCO agrees that the Novell judgment forecloses certain of its claims in this case as identified below,

THEREFORE it is hereby ORDERED, ADJUDGED, AND DECREED that the following claims set forth in SCO's Second Amended Complaint are dismissed with prejudice:

Breach of IBM Software Agreement (Count I)
Breach of IBM Sublicensing Agreement (Count II)
Breach of Sequent Software Agreement (Count III)
Breach of Sequent Sublicensing Agreement (Count IV)
Copyright Infringement (Count V)
Copyright Infringement (see Docket No. 398 at 4-5)
Interference with the 1995 Asset Purchase Agreement at Issue in Novell (Count VIII)
In addition, it is hereby ORDERED , ADJUDGED, AND DECREED that SCO's Unfair Competition claim (Count VI) is dismissed with prejudice insofar as that claim is based on the allegations that Novell does not own the copyrights to pre-1996 UNIX source code and does not

1

have the right to waive breaches of the licensing agreements pursuant to which IBM and others licensed pre-1996 UNIX source code.

DATED this ___ of _______, day 2013.

BY THE COURT

___________
David Nuffer
United States District Court Judge

2

SCO's version [PDF] read:
THEREFORE it is hereby ORDERED, ADJUDGED, AND DECREED that the following claims set forth in SCO’s Second Amended Complaint are dismissed with prejudice as mooted by the Novell judgment:.."
No. Not mooted. SCO lost on the merits. SCO's version also went on to say:
In addition, it is hereby ORDERED, ADJUDGED, AND DECREED that SCO’s Unfair Competition claim (Count VI) is dismissed with prejudice as mooted by the Novell judgment insofar as that claim is based on the allegations that Novell does not own the copyrights to pre-1996 UNIX source code and does not have the right to waive breaches of the licensing agreements pursuant to which IBM and others licensed pre-1996 UNIX source code.

As the Novell judgment has no bearing on the following SCO claims, they remain ripe for adjudication by the Court: SCO’s Unfair Competition claim (Count VI) concerning the Project Monterey joint venture, SCO’s Interference with Contract claim (Count VII), and SCO’s claim for Interference with Business Relationships (Count IX).

Each Party to bear its own fees and costs with regard to the dismissed claims.

Heh heh. SCO never changes, does it? If IBM's lawyers let their eyelids droop and snooze out for a millisecond, those SCOfolk sneak in something useful to SCO, hoping you won't notice until it's too late. SCO is a sketch, as my beloved granny used to say when she meant a great deal worse than that.

Moot in a legal context means, according to US Legal, that the judge doesn't have to decide anything and no judge has done so so far:

Moot refers to an issue that remains unsettled, open to argument or debatable. It is especially refers to a legal question which has not been determined by any decision of any court.
Decided on the merits means that the plaintiff can't resurrect the claims against the defendant 'til the end of time:
An ultimate determination rendered by a court in an action that concludes the status of legal rights contested in a controversy and precludes a later lawsuit on the same Cause of Action by the parties to the original lawsuit.

A decision on the merits is made by the application of Substantive Law to the essential facts of the case, not solely upon technical or procedural grounds.

I can't believe I missed that title. I need to focus again on SCO harder, however much I don't want to any more. The thing is, proposed orders aren't supposed to sneak in things the party didn't mention anywhere else. The word "moot" doesn't appear once in the SCO Statement [PDF]. So my eyelids drooped. I forgot how SCO acts. Or more accurately, I didn't want to think about SCO at all. I need to pull myself together and get with it. I can't express to you how much I *don't* want to cover this case any more. No matter how many flaws I may have, ten plus years of covering this case seems like too much punishment. Somehow I was over-charged by some overzealous prosecutor in some alternate universe over crimes in a previous life or something. I just know I don't deserve this. More pointedly, neither does IBM. Happily, IBM never gets tired, and I think you can see why this is my favorite law firm.

Of course, that is how SCO got sanctioned earlier in the case, for being sneaky. It's odd that they keep it up, after that, but in the recent astonishing words of Paula Dean, SCO in effect says, "I is what I is, and I'm not changing."

Here's IBM's Objections, as text:

SNELL & WILMER L.L.P.
Alan L. Sullivan (3152)
Amy F. Sorenson (8947)
[address, phone, fax, emails]

CRAVATH, SWAINE & MOORE LLP
Evan R. Chesler (admitted pro hac vice)
David R. Marriott (7572) [address, phone, fax, emails]

Attorneys for Defendant/Counterclaim-Plaintiff
International Business Machines Corporation

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH

THE SCO GROUP, INC.,

Plaintiff/Counterclaim-Defendant,

v.

INTERNATIONAL BUSINESS MACHINES
CORPORATION,

Defendant/Counterclaim-Plaintiff.

__________

IBM’S OBJECTIONS TO
THE SCO GROUP, INC.’S PROPOSED
PARTIAL JUDGMENT

Civil No. 2:03-CV-0294-DN

Honorable David Nuffer

Defendant/Counterclaim-Plaintiff International Business Machines Corporation (“IBM”) respectfully submits these objections to the [Proposed] Judgment Dismissing SCO’s Claims Mooted by the Final Judgment in SCO v. Novell (the “Proposed Partial Judgment”), submitted by Plaintiff/Counterclaim-Defendant The SCO Group, Inc.(n/k/a TSG Group, Inc.) (“SCO”) (Dkt. No. 1119-1).

Objections

1. In an order dated June 14, 2013, this Court directed SCO to file “a brief statement identifying its claims which it agrees are foreclosed by the Novell judgment and the form of a judgment dismissing those claims”. (Dkt. No. 1115 at ¶ 1.) The Court then provided that “[o]n or before June 28, 2013, IBM may file any objection to the form of that order”. (Dkt. No. 1115 at ¶ 2.) SCO timely filed its statement and its Proposed Partial Judgment.

2. IBM has no objection to SCO’s Proposed Partial Judgment insofar as it seeks to dismiss Counts I-V, Count VIII and SCO’s copyright-infringement claim pertaining to Linux with prejudice. IBM also has no objection to SCO’s Proposed Partial Judgment insofar as it seeks to dismiss certain branches of Count VI with prejudice.

3. IBM has the following objections to SCO’s Proposed Partial Judgment:

a. IBM objects to SCO’s Proposed Partial Judgment insofar as it states that the claims to be dismissed are moot. The claims are not moot; they are barred under principles of issue preclusion (or collateral estoppel). The Novell Judgment decided essential elements of these claims against SCO on the merits, and SCO is precluded from relitigating them against IBM.

b. IBM objects to SCO’s Proposed Partial Judgment insofar as it provides

that the Novell Judgment “has no bearing” on Count VII, Count IX and the part of Count VI concerning Project Monterey. (Proposed Partial Judgment at 2.) IBM disagrees, and IBM will address these issues in its forthcoming summary judgment motion.

c. IBM objects to SCO’s Proposed Partial Judgment insofar as it uses the phrase “joint venture” to describe Project Monterey. The Project Monterey agreement expressly provides that it did not establish a joint venture.

d. IBM objects to SCO’s Proposed Partial Judgment insofar as it provides that each party is “to bear its own fees and costs with regard to the dismissed claims”. (Proposed Partial Judgment at 2.) As a “prevailing party”, IBM is at least entitled to seek fees and costs under the Copyright Act. IBM proposes to defer the issue of fees and costs until after the entry of final judgment on all claims and issues in this case.

4. While IBM believes the Novell Judgment forecloses more claims than does SCO (and more claims than are covered by SCO’s Proposed Partial Judgment), IBM will address the impact of the Novell Judgment on all of SCO’s remaining claims and IBM’s counterclaims in its forthcoming summary judgment motion, as directed by the Court in its order of June 14, 2013. (Dkt. No. 1115 at ¶ 3.)

5. Finally, we note that SCO has changed its name to “TSG Group, Inc.”, and that its bankruptcy has been converted to Chapter 7. (See In re TSG Group, Inc., No.1:07-bk-11337, Dkt. Nos. 1291, 1439 (Del. Bankr. May 19, 2011, Aug. 24, 2012) (Exs. C, D).) IBM suggests the Proposed Partial Judgment reflect SCO’s name change, but that the caption need not be amended.

6. For the Court’s convenience, we attach “clean” and “blackline” versions of the

2

Proposed Partial Judgment, as amended, as Exhibits A and B, respectively.

DATED this 28th day of June, 2013.

SNELL & WILMER L.L.P.

/s/ Amy F. Sorenson
Alan L. Sullivan
Amy F. Sorenson

CRAVATH, SWAINE & MOORE LLP
Evan R. Chesler
David R. Marriott

Attorneys for Defendant/Counterclaim-Plaintiff
International Business Machines Corporation

Of Counsel:
INTERNATIONAL BUSINESS MACHINES CORPORATION
Alec S. Berman
[address, phone]

Attorneys for Defendant/Counterclaim-Plaintiff
International Business Machines Corporation

3


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