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Caldera Proxy Statement, April 24, 2003
Tuesday, July 01 2003 @ 07:26 PM EDT

In a Caldera International, Inc./UT, Proxy Statement filed in April, I found a couple of interesting paragraphs regarding compensation of directors and executive officers:

"Each director is paid $25,000 plus $5,000 per committee served on, payable in restricted shares of the Company's common stock priced effective Feb. 21, 2003. Directors also participate in the Company's Omnibus Stock Incentive Plan, which provides for the award of an option to acquire 45,000 shares on joining the board and an option to acquire 15,000 shares for each year the board member continues to serve once stockholder approval is obtained at the Company's Annual Meeting,

"... General Compensation Policy. The compensation committee's policy is to provide the Company's executive officers with compensation opportunities that are based upon their personal performance, the financial performance of the Company and their contribution to that performance and that are competitive enough to attract and retain highly skilled individuals. Each executive officer's compensation package is comprised of three elements: i) base salary that is competitive with the market and reflects individual performance; ii) quarterly performance awards tied to performance of agreed-upon corporate objectives, and certain financial performance metrics of the Company, including but not limited to consolidated revenue, gross margin, net operating income and net income; and iii) long-term stock-based incentive awards designed to strengthen the mutuality of interests between the executive officers and its stockholders. As an officer's level of responsibility increases, a greater proportion of his or her total compensation will be tied to the Company's financial performance and stock price appreciation rather than base salary."[emphasis added]


So, am I missing something or aren't they saying that their top guys get paid more in stock than in money, and increasingly so the longer they are with the company as a director, because they want them to feel the same motivation as a shareholder?

Here are the two principal shareholders, both with Canopy Group:

"Ralph J. Yarro III has served as a member of the Company's Board of Directors since August1998. Mr.Yarro has served as the President and Chief Executive Officer of The Canopy Group,Inc. since April1995. Prior to joining The Canopy Group,Inc., he served as a graphic artist for the Noorda Family Trust. Mr.Yarro holds a BA from Brigham Young University.

"Darcy Mott has served as a member of the Company's Board of Directors since March of 2002. Mr.Mott has served as Vice President, Treasurer and Chief Financial Officer of The Canopy Group,Inc., a technology investment company, since May1999. Prior to joining Canopy, Mr.Mott served as Vice President and Treasurer of Novell,Inc., from December1995 to September1998 and prior to that position, Mr.Mott served in various other financial management positions for Novell since September1986. Mr.Mott worked for Arthur Andersen& Company from 1977 to 1986. Mr.Mott is a certified public accountant and holds a B.S. degree in Accounting from Brigham Young University. "

The principal stockholders listed in this document include:

The Canopy Group, Inc.
333 South 520 West, Suite 300
Lindon, Utah 84042
5,318,494
43.4 %

Listed also, as named officers and directors are:

Ralph J. Yarro, III
5,388,669 (1)
43.9%

Darcy Mott
5,318,831 (4)
43.4 %


In addition, the company and Canopy are in a lease agreement for the SCO headquarters:

"During fiscal year 2002, the Company entered into an operating lease agreement with Canopy for office space for its headquarters in Utah that continues through December2007. The Company pays Canopy approximately $46,000 per month for this office space."


Among things to be voted on at the then-next stockholder meeting, May 16:

"Proposal to approve the 2002 Omnibus Stock Incentive Plan and to provide for up to 1,500,000 shares of common stock to be issued under the plan.

"Proposal to approve an amendment to the 2000 Employee Stock Purchase Plan to provide for an additional 500,000 shares to be issued under the plan."


Earlier today, I posted some Lycos information I had come across. However, checking at the SEC site, I don't believe that the Lycos information can be correct, so I have taken it down.

Hamidi Wins on Appeal
Monday, June 30 2003 @ 03:53 PM EDT

This isn't about SCO, but the case is so significant, I wanted to post it immediately. Intel v. Hamidi has been overturned on appeal. The court ruled that no trespass to chattels can occur without actual physical interference with use or physical damage. Annoying doesn't count.

You can read the case from the CA Supreme Court website. It's a PDF. Click on "Jun 30 2003 S103781A.PDF". This case matters a great deal, because this trespass to chattels tort has been used over and over, by ISPs against spammers and by companies against bots and crackers, and gradually it's been getting larger and larger and basically narrowing freedom on the internet. This court just put that spread into reverse. To get a clear picture of just what was at stake and every little reason why it matters so much, you can read the Harvard Law Review article, "The Long Arm of Cyber-reach."

You can read some other cases where trespass to chattels was used, and the definition is here. Also here is EFF's explanation. This is a huge win for EFF. Jennifer Granick, Esq. helped out too. You can read EFF's amicus brief, which is a work of art, if you love the law. To really understand what the Supreme Court wrote, you need to read the lower Appeals Court decision. That's what they just overturned. Under the old ruling, you could be sued just for sending email, in effect. I don't know yet if Intel will appeal this higher. If not, this is huge.

P.S. CNN is quoting an Intel spokesman on this:

Chuck Mulloy, an Intel spokesman, said the company was "disappointed in the court's decision. We're studying the opinion to assess our options in the event that Hamidi resumes spamming against Intel."
That doesn't sound like an appeal to me. It may be foreshadowing that they intend to sue Hamidi afresh, using a different type of claim, something the judge indicated might be done. The judge mentioned such claims as interference with prospective economic relations or intentional infliction of emotional distress and some other speech-based torts. Hamidi's group, FACE-Intel, uses some strong language on that site. You surely are not in any doubt as to their views on Intel. No doubt Mr. Hamidi's lawyers are explaining exactly what not to do to avoid being sued again. Of course the decision literally just happened, so Intel's lawyers are still looking it over carefully and will decide what they will do only after they complete that review and then ask Intel what it wants to do.

What Moglen Really Said
Monday, June 30 2003 @ 01:57 AM EDT

The official FSF Statement on SCO v IBM is available, written by their pro bono attorney, Eben Moglen, Esq. I haven't seen anyone yet notice what jumped off the page to me:

The Foundation notes that despite the alarmist statements SCO's employees have made, the Foundation has not been sued, nor has SCO, despite our requests, identified any work whose copyright the Foundation holds-including all of IBM's modifications to the kernel for use with IBM's S/390 mainframe computers, assigned to the Foundation by IBM--that SCO asserts infringes its rights in any way.

So, FSF holds the copyrights to all of IBM's contributions to the kernel "for use with IBM's S/390 mainframe computers" and yet SCO hasn't even contacted, or worse, responded to FSF contacts, in order to identify any allegedly infringing code?

This is a significant piece of news, because it'll be mighty hard down the road to claim damages for copyright infringement, certainly for this time period and maybe at all, if SCO isn't lifting a finger to mitigate its damages and is allowing infringement without protest. You can lose your rights by doing exactly that. If you read what I wrote about Judge Kimball, on June 10, you'll find a case where a plaintiff lost his copyright because he allowed it for too long before protesting.

In brief, evidently, he is pointing out, SCO's copyright isn't being infringed. It's just a contract case. And if all of IBM's kernel contribution copyrights belong to FSF, it means that if SCO released "Linux" under the GPL inadvertently (ha ha), then they were violating those FSF copyrights. Which leaves open some possiblities for FSF to go after SCO, should they choose to, and a defense should SCO later decide to attack for copyright infringement, which so far they have said they will, said they won't. I think, if I have understood what Moglen wrote correctly, he's saying they don't need to worry about which it should be, because they can't -- or at least that they would be walking into a minefield if they try. Certainly, this public statement from FSF makes it impossible for SCO to now wait until after the IBM case before it leaps on "Linux", which seemed to be the game plan. It's now or never.

How the 10th Circuit Defines Derivative Code
Sunday, June 29 2003 @ 09:20 PM EDT

If you want to know how the 10th Circuit, which is the circuit Utah falls into, defines derivative code, you can read Dan Ravicher, Esq.'s paper, "Software Derivative Work: A Circuit Dependent Determination." [PDF]

According to this analysis of the different definitions the different federal court circuits follow, the 10th Circuit follows the AFC test, abstraction, filtration, comparison:

Under the AFC test, a court first abstracts from the original program its constituent structural parts. Then, the court filters from those structural parts all unprotectable portions, including incorporated ideas, expression that is necessarily incidental to those ideas, and elements that are taken from the public domain. Finally, the court compares any and all remaining kernels of creative expression to the structure of the second program to determine whether the software programs at issue are substantially similar so as to warrant a finding that one is the derivative work of the other.

Often the courts that apply the AFC test will perform a quick initial comparison between the entirety of the two programs at issue in order to help determine whether one is a derivative work of the other. Such an holistic comparison, although not a substitute for the full application of the AFC test when, as discussed below, only certain components of the original program are compared to the second program. If such a pattern is revealed by the quick initial comparison, the court is more likely to conclude that the second work is indeed a derivative of the original.

Details on each step of the process are in the article.

3 comments  View Printable Version
Most Recent Post: 07/01 03:10PM by Anonymous

Declaratory Judgments -- How to Get a Quick Answer from a Judge
Sunday, June 29 2003 @ 01:28 AM EDT

Declaratory Judgments --
How to Get a Quick Answer from a Judge


Let's imagine the CEO of a company has been going around telling the media that it intends to sue you. Some time goes by, and the threats get louder and more frequent. Yet, the company doesn't file any case but keeps saying it is going to eventually. Then you get a threatening letter, notifying you that you are infringing on his IP rights and saying you'd better pay for a license. You don't want to do that, and you don't think you are infringing. In this hypothetical situation, do you have to just sit and wait for the other shoe to drop or can you take the initiative and go to court yourself, rather than waiting to be sued?

In certain limited circumstances, you can take the initiative. There is something called a declaratory judgment. You go to court and in essence say to the judge: This company is going to sue me and I need our rights with respect to this dispute settled asap, so this cloud over my company's head doesn't ruin my business. If the judge accepts the dispute as one he wants to settle, he can, and after hearing both sides he can issue a declaratory judgment, in which he "declares" what is what and exactly what each party's rights are.

While there are no enforcement powers associated with a declaratory judgment, sometimes that doesn't matter. For example, Roe v. Wade involved a declaratory judgment that ended up with abortion statutes being declared unconstitutional. Yes, that Roe v. Wade. A pregnant woman (Roe) brought a class action, challenging the constitutionality of Texas' abortion law. A doctor who was facing two state abortion prosecutions under the statute also intervened. The court said they were entitled to declaratory relief, and the court declared the abortion statute void. It was appealed and the rest, as they say, is history.

Now, a judge doesn't have to hear a request for a declaratory judgment. He has discretion. It's an enabling statute, not one that confers rights on you, the litigant. Your case has to fit into the confines of the Declaratory Judgment Act, 28 U.S.C. 2201 -02. States have equivalent statutes, such as Calif.Code.Civ.Proc. 1060-1062.5.

What confines? First, you have to have an actual "controversy" in the constitutional sense. Basically, that means it isn't a hypothetical problem and it isn't moot, meaning the court must be able to settle your problem with a declaratory judgment. And you must have a real controversy, meaning you really have a reasonable apprehension of being sued. If you fit within those confines, and your lawyer can tell you if you seem to -- it's the "actual controversy" part that can be tricky -- your lawyer can ask the court for a declaratory judgment that declares that you are not guilty of infringing the hypothetical CEO's precious hypothetical IP.

Here's US Code Title 28, Ch 151, Sec 2201, the Declaratory Judgment Act. And here is the definition from Cornell or you can just click on the link to Law. com's dictionary, on the left. Here's a tutorial on declaratory judgments.

Of course, we're talking hypothetically here, but suppose we now return to reality. I was thinking that maybe Mr. McBride started backing off and saying they probably won't be suing any Linux distributors precisely because it dawned on somebody in Utah that declaratory judgments might be forthcoming. Rather than let a quick resolution occur that way, they say, "nah, we don't want to ruin the GPL and destroy Linux" in the hope that no one will be able to meet the "reasonable apprehension of suit" requirement.

Then, after they, in their dreams, win the IBM case, they just change their tune again and decide to sue Linux distributors after all. Changing their minds is one thing they have definitely shown they can do. Of course, this could all be in my imagination, too, couldn't it?

"maddog" to SCO: "ID Your Code If You Don't Want It in Linux, Because We Certainly Don't Want It" --
Friday, June 27 2003 @ 03:48 PM EDT

"maddog" to SCO: "ID Your Code If You Don't Want It in Linux, Because We Certainly Don't Want It" --
Listen to 2003 Usenix Conference on SCO



There is an MP3 of the June 9-14, 2003 Usenix Conference on SCO available. It makes reference to slides, which you can find here, so you can follow along during the talks by opening two windows or two browsers. The panel includes Chris DiBona, a former Slashdot editor and founder of Damage Studios, Jon "maddog" Hall, President of Linux International, and Don Marti, editor of Linux Journal.

Topics include coverage of the SCO claims, the ex-SCO employee who says the code was put there by his group when they worked on the 2-year UNIX-Linux merge of code, and an idea for examining code using software developed by a university to detect plagiarized code in large software projects which also can be used to keep a history of software contributions and which they are thinking of asking to use to search for older BSD code to see if identical code is also in there prior to System V.

De Bona's read on the SCO claims: "SCO is saying 'Legally we deserve profits.'" Jon "maddog" Hall says that SCO's refusal to tell what the code is makes it impossible to fix the problem. He wishes they would and says, "Take your code, please! We don't want it." They also touch on how clean code practices in proprietary companies as compared with Linux, and all agree that both are vulnerable to problems and each have systems to prevent such problems. Hall and De Bona mention several examples of such incidents that have occured in proprietary software over the years, including the MS SQL Server case, where MS was found guilty of patent violations.

Hall also mentions an OSDL lab in Portland, Oregon, where coders can test code in an environment that can handle large projects. They also have projects, including one to make Linux carrier grade for use in telephone systems. SCO, until recently, he says, was a member and as a result, code could have been passed in either direction in that lab, from SCO to Linux, for example, or each could have gotten it from BSD. The current OSDL page does not list SCO as a sponsor, but the Wayback Machine shows Caldera Systems listed as a sponsor on the same page back on both December 22, 2001 and February 28, 2002.

Attorney Chander Responds to Our Questions on Discovery
Friday, June 27 2003 @ 01:17 AM EDT

--

I got the following very gracious email about whether SCO can use discovery the way McBride seemed to be indicating -- from Anupam Chander, the attorney whose article on the SCO case appeared in Findlaw Thursday. Keep in mind that he is speaking "off the cuff".

Translation: That means don't sue him, pls; he's speaking informally, conversationally. And don't take it as legal advice to you personally. He hasn't spent hours and hours researching the fine points the way he would if he were actually working on the case. There are also still large gaps in what we know about the facts of this case, and he isn't in Utah, either, where it looks like the case might be heard. It's very kind of him to give a general impression. Now that the disclaimer is behind us, here is what he wrote:

"the claims against IBM are contractual and tort claims that lie, at least in their current form, only against IBM. IBM is accused of violating contracts it signed with SCO's predecessors in interest. to the extent that SCO seeks discovery against third parties, it would only be to support their claims that IBM has violated its obligations under its contracts (or engaged in unfair competition). i don't really see why SCO would need discovery against third parties to prove that Linux has been tainted by IBM's work in violation of its contractual responsibilities. i'm not sure offhand what the rules are governing discovery against third parties. thanks for covering this case--it's an important service that you're doing." [emphasis added by me]

So, thank you, Mr. Chander.

If there are any attorneys in Utah who would care to help us with the last piece about third parties and the rules about that in Utah, can you email me please or post? Anyone know any attorneys in Utah? Or law students? A nearby state might be OK too, like Idaho or Nevada. In places with a low population, sometimes there is a lot of overlap. It'd take us a while to research it, but someone practicing in that state would probably know the answer very readily. The only indication I have seen is the case I cited in my article on discovery, where the party seeking discovery was denied because the judge felt he or she (I forget which now, she, I think) was trying to build a case against the third party.

I just went and looked again at that case, and my memory was accurate. Here is the part of the ruling that indicated to me that Utah does not look kindly on discovery of third parties, particularly if your motive is to build a case against that third party, Major v. Hills, a 1999 case in the Supreme Court of the State of Utah (1999 UT 44). This was an accident case, and one of the parties wanted to do discovery regarding the insurance company, Farmers Insurance. Here's why the judge said the request was improper, with my emphasis added for clarity:

"On appeal, Ms. Hills asserts that the district court erred in ordering her to respond to the Majors' discovery request because (1) the information requested is not relevant to the case at bar and is sought only for the improper purpose of formulating a claim against a non-party to this action; and (2) the information is protected as work product under Rule 26(b)(3) of the Utah Rules of Civil Procedure. The Majors assert that the information is discoverable because of the contractual relationship between Ms. Hills and her insurer. Based on specific revelations made by Ms. Hills' counsel during oral argument before this court, we reverse the district court as to the discovery order, concluding that the information underlying the VVC is irrelevant and therefore not discoverable.(1)

"Before the district court, the Majors supported their discovery request by claiming that they needed the information both to investigate a possible bad faith or fraud claim against Farmers and to rebut Ms. Hills' use of the VVC at trial. Ms. Hills focused primarily on the impropriety of using discovery as a means to investigate potential claims against non-parties. At that time, Ms. Hills did not indicate in any definitive manner that she would not introduce the VVC at trial.

"Although not specifically stating so, the district court's decision to protect the bases of other comparisons completed by Farmers suggests that the court accepted Ms. Hills' contention that the Majors were improperly fishing for information to support possible claims against Farmers. Thus, the only apparent justification for the district court's order compelling discovery was that the information requested could be relevant to impeach the VVC should Ms. Hills decide to introduce it at trial. During oral argument before this court, however, Ms. Hills' counsel stipulated that she would not use the VVC at trial. This stipulation, made in open court, removes any need which the Majors might have for information useful to impeach that document. In this context, then, the information sought is irrelevant under Rule 401 of the Utah Rules of Evidence and therefore undiscoverable under Rule 26 of the Utah Rules of Civil Procedure.(2) See, e.g., Chatterton v. Walker, 938 P.2d 255, 264 (Utah 1997) (holding that irrelevant information is not discoverable under Rule 26 of the Utah Rules of Civil Procedure). We therefore reverse the district court's order insofar as it granted the Majors' motion to compel."


So while the judge here was ruling on something else, his language surely gives a strong hint, at least, that you can't do in Utah what McBride has announced he wants to use discovery for.

Shop 'Til You Drop
Thursday, June 26 2003 @ 05:34 PM EDT



If you would like to follow all the buying and selling of SCO stock by SCO execs, mostly selling, go here. I did, and here is what has happened in June:

Senior VP Reginald C. Broughton sold 5,000 shares at $11.08 per share, proceeds of $55,400 on June 20

Darl McBride bought 7003 shares at price 0.001 on June 13.

VP, Finance Michael P. Olson sold on 6/11/03 6,000 shares at around $8.60 a share

Jeff F. Hunsaker, VP, Int'l Marketing, sold on 6//6/03 5,000 shares at 8.9

Bawa Opinder, VP Global Services, sold on 6/3/03 all his stock, 15,000 shares, at 6. On 6/4 Opinder bought 15,000 shares at 1.2 and sold 15,000 shares at 6.6

On 6/9 CFO Robert K. Bench bought 4,000 shares at 9.16 and sold 200 at 9.19, 500 at 9.201, 400 at 9.2, and 1900 at 9.3.

I am showing all this info, because according to some Slashdotters, Yahoo and MSN aren't showing the complete list, even though they used to. I went to the sites to see for myself, and sure enough, it's true that not all the information is there. Whether it used to be there I was unable to verify. Compare and contrast the above info with Yahoo!, which shows only one trade and MSN's MoneyCentral, which is also incomplete.

5 comments  View Printable Version
Most Recent Post: 06/26 07:24PM by Anonymous

Attorney: SCO's Case Dubious; Proprietary Software the Villain Here
Thursday, June 26 2003 @ 11:29 AM EDT



Anupam Chander, Professor of Law at the University of California, Davis, School of Law, a graduate of Yale Law School and Harvard College, who specializes in cyberlaw and international law, has a strong defense of open source software on FindLaw, cited on Slashdot, in which he confirms what I've been saying here. But because he is an attorney, he can speak with greater force. He says while SCO and Microsoft allege that it's dangerous to use open source software because you never know where the code comes from, it's actually closed, proprietary software that is dangerous, because you never know who will decide to sue you:
Proprietary interests, especially in intellectual property, tend to breed confidentiality - as anyone who ever signed a nondisclosure agreement with a fledgling dotcom with a "brilliant business idea" well knows. And confidentiality, in turn, breeds conspiracy theories, and allegations of theft - or unfair competition, or breach of contract, or the like. In contrast, if there is something amiss in open code, it will be more difficult to hide.
He also addresses the issue of SCO claiming derivative code rights:
The final policy argument in favor of open source software is, of course, societal. At some point, information that is widely studied in universities, reprinted in college textbooks, and advanced through academic scholarship must be considered public domain.

For this reason, SCO's claims that its intellectual property rights extend to basic computing features of large operating systems cannot be allowed to stand. Otherwise, there will be no such thing as truly open, free software - and as a consequence, there will effectively be an economy-dragging tax on information technology.

In short, society has an interest in seeing SCO lose. As Jon "Maddog" Hall said in a speech in England, open source software is an international treasure that mustn't be allowed to be destroyed by greedy individuals, and he compared SCO to looters stealing Iraq's cultural treasures for a quick buck.

9 comments  View Printable Version
Most Recent Post: 06/28 04:56PM by Anonymous

Discovery Rules
Thursday, June 26 2003 @ 03:03 AM EDT

A reader asks whether discovery, such as McBride says he will be seeking, would be allowed. While that is entirely up to the judge, and the skill of IBM lawyers in responding to discovery requests, you can read up on how discovery works, both on a federal level and under Utah code. At least then you'll understand what discovery is and how it is supposed to work. You don't necessarily get everything you ask for. You ask, the other side then says no to what it feels isn't discoverable under the pertinent rules, and then a judge decides. You are not supposed to use discovery to try to flesh out your case. You are supposed to know pretty much what you are asking to see. So-called "fishing expeditions", where you ask to see "everything" that might be related in any way to the case will generally be denied as overbroad.

Discovery has a fundamental purpose, and that is to compel both sides to present their evidence prior to trial. Real trials are not like Perry Mason, where big surprises occur as someone is testifying or a surprise witness is suddenly called. Both sides, at least in most cases, know pretty much what to expect before the trial opens. The reason this is a good thing is that is saves a lot of time. If a case is just a nuisance case, you surely want to know early on, so you can do something about it. And it's only fair to let each side prepare its best shot. That's the theory anyway. Sometimes when you hear that a lawsuit has been filed and then you hear it has settled prior to the trial beginning, it's because something was "discovered" that made it clear who would ultimately be the victor, and the likely loser decides it's cheaper to just try to negotiate a settlement.

Now, because each side wants to know everything about the other side's case and wishes to reveal as little as possible about its own, there are rules about what you must reveal and what you don't have to reveal, so the same arguments don't have to happen over and over in each case.

The Federal Rule of Civil Procedure 26(a)(1)(B) requires a party to provide to other parties "a copy of, or a description by category and location of, all documents, data compilations, and tangible things that are in the possession, custody, or control of the party and the disclosing party may use to support its claims or defenses . . . [base "] (See this case.)

Notice it is talking about parties, not outsiders not party to the action. Even without a discovery request, you are supposed to do this.

But both sides will also serve a discovery request on the other, basically listing everything they want to see that they feel they are entitled to:

Rule 34(a) of F.R.C.P. states: (a) Scope. Any party may serve on any other party a request (1) to produce . . . to inspect and copy, any designated documents . .. . and other data compilations from which information can be obtained . . . or to inspect and copy, test, or sample any tangible things which constitute or contain matters within the scope of Rule 26(b). . .; or (2) to permit entry upon designated land or other property . . . inspection . . . testing, or sampling the property or any designated object or operation thereon, within the scope of Rule 26(b).

The party served then gets to claim that the request is overbroad, too expensive to comply with, not relevant, duplicative, etc. Or it just ignores the request and forces the other side to ask a judge to compel the discovery. Ultimately the judge decides.

Under Rule 26(b)(2) of the Federal Rules of Civil Procedure, the court can limit discovery if the discovery is "unreasonably cumulative or duplicative, or is obtainable from some other source that is more convenient, less burdensome, or less expensive; or . . the burden or expense of the proposed discovery outweighs its likely benefit".

You can read the federal digital discovery rules here. And for a federal overview, you can read this page.

Now, if this case is heard in Utah, and IBM is asking that it be moved out of Utah, then Utah law comes into the picture too. Here's a snip from a Utah case that explains Utah's law:

Rule 26(b)(1) of the Utah Rules of Civil Procedure provides in relevant part:
Parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party[.] Utah R. Civ. P. 26(b)(1). Rule 401 of the Utah Rules of Evidence defines "relevant evidence" as "evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Utah R. Evid. 401.


Rule 401 of Utah's Rules of Evidence could come into play also. It defines, for example, what is irrelevant. If it's found irrelevant to the lawsuit, it is not discoverable:

"Utah R. Civ. P. 26(b)(1). Rule 401 of the Utah Rules of Evidence defines "relevant evidence" as "evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Utah R. Evid. 401. "

In Utah, your case can be dismissed if you don't provide discovery validly requested by the other side under Rule 37(d). Here's a snip from another Utah case, where the judge explains it:

" . . .we first acknowledge that '[t]rial courts have broad discretion in managing the cases assigned to their courts.' Berrett v. Denver & Rio Grande W. R.R. Co. , 830 P.2d 291, 293 (Utah Ct. App. 1992); see also Bennion v. Utah State Bd. of Oil, Gas & Mining , 675 P.2d 1135, 1144 (Utah 1983) ('Time, place, and manner requirements relating to discovery are committed to the discretion of the tribunal.'). See generally Utah R. Civ. P. 16. Further, under Rule 37 of the Utah Rules of Civil Procedure , the trial court also has broad discretion in selecting and imposing sanctions for discovery violations, including dismissing the noncomplying party's action. See Utah R. Civ. P. 37(b)(2)(C); Morton v. Continental Baking Co. , 314 Utah Adv. Rep. 33, 35 (Utah 1997) (according trial court broad discretion because trial court deals firsthand with parties and discovery process); Utah Dep't of Transp. v. Osguthorpe , 892 P.2d 4, 6 (Utah 1995) (same)."

But the judge can also issue a protective order, forbidding certain discovery from taking place:

"The relevant section of Rule 26--(c)(4). . . gives the court discretion to issue, in the interests of justice, a protective order "that certain matters not be inquired into, or that the scope of the discovery be limited to certain matters."

If a Utah party wishes to depose someone who is out of state, Utah has a method to follow to do that, as explained in this Utah Bar Journal article.

This doesn't directlly answer the question asked, because I don't know the answer. McBride says he has a contractual right to inspect IBM's customers using AIX as to their use of code on their property. I wonder though, because he has publicly terminated that contract and they aren't parties to the lawsuit. I don't know what the judge will say about it, but I feel sure that it will become an issue in contention. The point is that discovery works both ways. IBM gets to ask to discover what it wants to see too.

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