Here is SCO's Amended Answer to IBM's Amended Counterclaims, in response to IBM's Amended Counterclaims Against SCO. Groklaw's side-by-side chart helps to understand what they are responding to. Here are the changes from their prior answer back in October: - They have dropped what was originally their 15th Affirmative Defense: "On information and belief, one or more of the copyrights at issue is, or may be, unenforceable by reason of IBM's inequitable conduct, acts or omissions before the United States Patent and Trademark Office." That's dropped because it was a mistake to begin with.
- They have added Sections "116, and/or 256" to what is now the 16th Affirmative Defense.
- The Eighteenth and Nineteenth Affirmative Defenses are combined and greatly expanded, in which SCO lists factors they hope will prove inequitable conduct on IBM's part, rendering the claims of IBM's '746, '785, '211, and '209 patents unenforceable.
- The Nineteenth Affirmative Defense adds the words "or enforceable" to the phrase "any valid or enforceable claim".
- SCO adds as TWENTY FIFTH AFFIRMATIVE DEFENSE: "SCO states that IBM's request for treble damages and attorneys fees is barred because SCO acted in good faith, and this is not an exceptional case within the meaning of the Patent Code."
There is also some legal terminology I didn't explain earlier, in the Twelfh Affirmative Defense:
"IBM's own conduct, including that of its agents, contractors and
partners, and/or conduct of third parties constitute superseding or
intervening causes with respect to IBM's claims of damage or injury." Here's how Gifis' Law Dictionary explains intervening and superseding causes: "INTERVENING CAUSE [SUPERVENING] "one which comes into active operation in producing the result after the negligence of the defendant. 'Intervening' is used in a time sense; it refers to later events. If the defendant sets a fire with a strong wind blowing at the time, which carries the fire to the plaintiff's property, the wind does not intervene, since it was already in operation; but if the fire is set first, and the wind springs up later, it is then an intervening cause." Prosser, Torts 271. . . .
"SUPERSEDING CAUSE: an intervening cause which is so substantially responsible for the ultimate injury that it acts to cut off the liability of preceding actors regardless of whether their prior negligence was or was not a substantial factor in bringing about the injury complained of. Courts sometimes use 'superseding' interchangeably with 'intervening' in which case it does not have this meaning. Properly, the term 'superseding' is limited to an intervening cause which 'by its intervention prevents the actor from being liable for harm to another which his antecedent negligence is a substantial factor in bringing about.' Restatement (second), Torts Section 440."
Thanks to Newsome and rand for helping to transcribe.
**********************************************
Brent O. Hatch (5715)
Mark F. James (5295)
HATCH, JAMES & DODGE, P.C.
[address, phone, fax]
Stephen N. Zack
Mark J. Heise
BOIES, SCHILLER & FLEXNER L.L.P.
[ADDRESS, PHONE, FAX]
Attorneys for Plaintiff The SCO Group, Inc.
___________________________________
IN THE UNITED STATES DISTRICT COURT
DISTRICT OF UTAH
__________________________________
THE SCO GROUP, INC.,
a Delaware corporation,
Plaintiff,
vs.
INTERNATIONAL BUSINESS MACHINES
CORPORATION, a New York corporation,
Defendant.
_________________________________
SCO'S AMENDED ANSWER TO
IBM'S AMENDED
COUNTERCLAIMS
Case No. 03-CV-0294
Hon. Dale A. Kimball
Magistrate Judge Brooke C. Wells
________________________________
Plaintiff and counterclaim-defendant The SCO Group, Inc. ("SCO"), by and
through counsel, answers the amended counterclaims of defendant and
counterclaim-plaintiff International Business Machines Corporation
("IBM") and further admits, denies and alleges as follows:
ANSWER
1. Admits that the UNIX operating system was originally developed by
Bell Laboratories, then a development arm of AT&T Corp., but denies the
remaining allegations of ¶1.
2. Admits that it respects the intellectual property rights of others,
but denies the remaining allegations of ¶2.
3. Admits the allegations of ¶3.
4. Admits the Court has jurisdiction over the claims, but denies that
IBM has any valid claims and denies the remaining allegations of ¶4 not
specifically admitted herein.
5. Admits the allegations of ¶5.
6. Admits the allegations of ¶6.
7. Admits the allegations of ¶7.
8. Admits that the earliest UNIX operating system was built by software
engineers at Bell Laboratories, the research division of AT&T, but
denies the remaining allegations of ¶8 not specifically admitted herein.
9. Admits the allegations of ¶9.
10. Admits that AT&T sold UNIX assets, through its subsidiary USL, to
Novell in 1993, admits that Novell sold UNIX assets to The Santa Cruz
Operation, Inc., now know as Tarantella, Inc. ("Tarantella") in 1995,
admits that Tarantella is not affiliated with SCO but denies that Novell
sold only part of its UNIX assets and further denies the remaining
allegations contained in ¶10 not specifically admitted herein.
11. Denies the allegations of ¶11.
12. Admits that in 1985 IBM acquired certain UNIX rights pursuant to
license with AT&T, and admits that IBM and AT&T entered agreements as
referenced in ¶12, but denies that IBM's UNIX-related rights are
characterized as 'broad,' denies that IBM has any remaining rights under
the referenced agreements and denies the remaining allegations of ¶12
not specifically admitted herein.
13. Admits that IBM developed a version of UNIX pursuant to license
originally with AT&T and admits that IBM's version of UNIX is called AIX
but denies that IBM properly exercised its rights and is without
information sufficient to admit or deny the remaining allegations of
¶13, and therefore denies the same.
14. Admits that Sequent, like IBM, acquired certain UNIX rights pursuant
to its own license agreements with AT&T, all of which IBM failed to
attach to the its [sic] counterclaim, and admits that IBM acquired the stock of
Sequent and denies the remaining allegations of ¶14 not specifically
admitted herein.
15. Admits that Amendment X was entered into in 1996 by and among IBM,
original SCO and Novell, but denies the remaining allegations in ¶15.
16. Denies the allegations of ¶16 and alleges that Linux is, in
actuality, an unauthorized version of UNIX that is structured, assembled
and designed to be technologically indistinguishable from UNIX, and is
practically distinguishable only in that Linux is a 'free' version of
UNIX designed to destroy proprietary operating system software.
17. Admits that Linus Torvalds assembled the original Linux kernel but
is without information sufficient to admit or deny the remaining
allegations of ¶17 not specifically admitted herein, and therefore
denies the same.
18. Is without information sufficient to admit or deny the allegations
of ¶18, and therefore denies the same.
19. Admits that many developers have contributed software code to the
Linux kernel, admits that IBM contributed software code to the Linux
kernel, admits that the first iteration of Version 2.4 of the Linux
kernel was released in 2001, but is without information sufficient to
admit or deny the remaining allegations of ¶19 not specifically admitted
herein, and therefore denies the same.
20. Admits that Red Hat has distributed one or more versions of Linux,
which may include one or more versions of the Linux kernel, and admits
that the other distributors may have done so as well, including SCO, but
denies the remaining allegations of ¶20 not specifically admitted herein.
21. Admits the allegations of ¶21, but alleges that Linux software
contains other additional characteristics not identified in ¶21, and
further alleges that ¶21 does not provide a complete definition of Linux.
22. Admits that software license agreements typically reflect legal
limitations restricting the use and reproduction of works, admits that
Linux is available for free download, admits that the license presently
governing Linux (the General Public License) generally is oriented to
keep the source code publically available, but denies the remaining
allegations of ¶22 not specifically admitted herein.
23. Admits the allegations of ¶23, but denies enforceability or
applicability of the GPL.
24. Is without information sufficient to admit or deny the allegations
of ¶24, and therefore denies the same.
25. Admits that the GPL purports to guarantee the right to freely share
and change free software, but denies that the GPL applies to any program
whose authors commit to using it, denies enforceability or applicability
of the GPL, and is without information sufficient to admit or deny the
remaining allegations of ¶25 not specifically admitted herein, and
therefore denies the same.
26. Admits that the GPL allows a licensee to distribute copies of free
software, receive source code and change and use the software in new
free programs but is without information sufficient to admit or deny the
remaining allegations of ¶26 not specifically admitted herein, and
therefore denies the same.
27. Admits that Linux is licensed under the GPL and admits that Linux
contains some notices placed by some copyright holders, but denies
enforceability or applicability of the GPL and denies the remaining
allegations of ¶27 not specifically admitted herein.
28. Denies the allegations of ¶28.
29. Admits that it was originally founded as Caldera, Inc., admits that
in 1998 Caldera, Inc. sold certain of its assets to Caldera Systems,
Inc., but denies the remaining allegations in ¶29 not specifically
admitted herein.
30. Admits that it has distributed certain versions of the Linux
operating system but denies the remaining allegations of ¶30.
31. Admits that it previously developed and marketed software based on
certain versions of the Linux operating system, and admits that it has
provided certain Linux-related services, but denies the remaining
allegations of ¶31.
32. Admits that it previously distributed or re-distributed SCO Linux
server[sic], SCO OpenLinux Server, SCO OpenLinux Workstation and SCO Volution
Manager, and admits that SCO has suspended its Linux distribution, but
denies the remaining allegations in ¶32.
33. Denies the allegations of ¶33.
34. Admits that it previously distributed certain versions of Linux,
admits that it previously provided Linux-related educational programs,
admits that it joined UnitedLinux, but denies the remaining allegations
of ¶34 not specifically admitted herein.
35. Admits the allegations of ¶35.
36. Admits that it previously supported in some ways the open-source
community prior to discovery of violations of its intellectual property
rights by IBM and others, but denies the existence of any "scheme," and
denies the allegations of ¶36 not specifically admitted herein.
37. Admits that some of its products were previously made available for
licensing under the GPL, but denies the remaining allegations of ¶36 not
specifically admitted herein.
38. Denies the allegations of ¶38.
39. Admits that it previously engaged in certain Linux-related
activities, but denies the remaining allegations of ¶39 not specifically
admitted herein.
40. Admits that it has contributed to certain open-source development
projects, but denies the remaining allegations of ¶40 not specifically
admitted herein.
41. Denies the allegations of ¶41.
42. Admits the allegations of ¶42, but alleges that SCO was unaware of
IBM's Linux-related investment prior to its formal announcements thereof,
and further alleges that IBM secretly and improperly failed to disclose
to SCO such Linux-related investments and its intentions with respect to
Linux before and during Project Monterey.
43. Admits the allegations of ¶43.
44. Admits that IBM has contributed source code to Linux projects under
the GPL, but denies that such contributions were proper or legal, and
denies the remaining allegations of ¶44 not specifically admitted herein.
45. Admits that it completed a public offering, admits that IBM has
established its business around Linux and that IBM has received a
significant amount of revenue and profit related to Linux, admits that
SCO has never generated a profit related to Linux, admits that SCO has
not generated profit until recently, but denies the remaining
allegations of ¶45 not specifically admitted herein and alleges that
IBM's Linux-related revenue is from its wrongful conduct in violation of
SCO's legal and contractual rights.
46. Admits that Caldera Systems, Inc. was merged into Caldera
International, Inc., admits that SCO acquired rights to the UNIX
operating system originally developed by Bell Laboratories, but denies
the remaining allegations of ¶46 not specifically admitted herein.
47. Denies the allegations of ¶47.
48. Denies the allegations of ¶48.
49. Denies the allegations of ¶49.
50. Denies the allegations of ¶50.
51. Denies the allegations of ¶51.
52. Denies the allegations of ¶52.
53. Admits it alleges that IBM has breached contractual obligations to
SCO by, among other things, incorporating and inducing others to
incorporate source code in the Linux kernel in violation of SCO's
contractual and intellectual property rights, and that IBM has competed
unfairly, interfered with SCO's contract rights with others and
misappropriated and/or misused trade secrets, but denies the remaining
allegations of ¶53 not specifically admitted herein.
54. Denies the allegations of ¶54.
55. Admits having sent letters to 1500 of the world's largest
corporations, alleges that the letters are the best evidence of the
contents thereof, denies that said letters threatened litigation and
denies the remaining allegations of ¶55 not specifically admitted herein.
56. Denies the allegations of ¶56.
57. Admits that it has made certain public statements regarding IBM's
right to use AIX and Dynix, admits that it claims the legal right and
authority to revoke, and has revoked, IBM's right to use, license or
distribute AIX and that it has so stated in certain statements, admits
that it claims the legal right to revoke IBM's use, license or
distribution of Dynix and has so stated in certain statements, but
denies the remaining allegations of ¶57 not specifically admitted herein.
58. Admits it claims that licensing and sublicensing agreements and
related agreements with IBM give SCO the right to control certain uses
of AIX by IBM, admits it claims that Linux is, in material part, an
unauthorized derivative of UNIX and that SCO has so stated, admits it
claims that as of and after June 16, 2003 IBM's right to further use,
license or distribute AIX was terminated and that SCO has so stated,
admits it claims that IBM customers who license AIX following June 16,
2003 are doing so in violation of SCO's rights and that SCO has so
stated, admits it claims that certain uses of Linux infringe on SCO's
intellectual property rights and that SCO has so stated, but denies the
remaining allegations of ¶58 not specifically admitted herein.
59. Admits it claims that IBM has contributed certain Dynix code to
Linux in violation of its contractual and legal obligations to SCO and
that SCO has so stated, admits it claims that IBM's violation of SCO's
rights are giving rise to damages as a result of IBM's improper profit
from Linux and improper continued use of AIX, and that SCO has so
stated, but denies the remaining allegations of ¶59 not specifically
admitted herein.
60. Admits the existence of the letter of June 9, 2003 but denies any
legal or factual basis for the said letter and denies the remaining
allegations of ¶60 not specifically admitted herein.
61. Admits the existence of the letter of June 12, 2003 but denies any
right in Novell to waive or revoke SCO's rights and denies any legal or
factual basis for the said letter and denies the remaining allegations
of ¶61 not specifically admitted herein.
62. Denies the allegations of ¶62.
63. Admits it has revoked IBM's right to further use, license, or
distribute AIX, pursuant to the express terms of the Software Agreement
and related documents, and that it has so stated, but denies the
remaining allegations of ¶63 not specifically admitted herein.
64. Admits that IBM sent letters dated April 2, 2003 and May 5, 2003 but
denies the remaining allegations of ¶64 not specifically admitted herein.
65. Denies the allegations of ¶65.
66. Denies the allegations of ¶66.
67. Admits that IBM is currently without legal or contractual authority
to use, license or distribute AIX or Dynix, based on its breach of
agreement with SCO and SCO's resulting termination of IBM's AIX software
agreement and related agreements and Sequent's Dynix software agreement
and related agreements, and admits that SCO has so stated, but denies
the remaining allegations of ¶67 not specifically admitted herein.
68. Admits that SCO has offered a license to Fortune 1000 and Global
500 Linux users as a means of permitting lawful use of certain Linux
products and that SCO has so stated, but
denies the remaining allegations of ¶68 not specifically admitted herein.
69. Denies the allegations of ¶69.
70. Denies the allegations of ¶70.
71. Admits that IBM has made contributions of source code to Linux 2.4
and 2.5 kernels under the GPL, but denies the applicability or
enforceability of the GPL and denies the remaining allegations of ¶71
not specifically admitted herein.
72. Admits that IBM and others have breached SCO's intellectual
property rights, but denies the remaining allegations of ¶72.
73. Denies the allegations of ¶73 and denies the enforceability or
applicability of the GPL.
74. Denies the allegations of ¶74.
75. Admits that SCO licenses and distributes UnixWare, "OpenServer,"
"SCO Manager," and "Reliant HA," but denies infringement and denies the
remaining allegations of ¶75.
76. Denies the allegations of ¶76.
77. Denies the allegations of ¶77.
78. Repeats and realleges ¶¶ 1-77, above.
79. Admits that IBM continues to be obligated to SCO by confidentiality
requirements and other provisions in the AT&T Agreements and Amendment X
that, by their terms, specifically continue beyond termination, but
alleges that IBM's rights to use, license and distribute under the said
agreements has been lawfully and properly terminated, and therefore
denies that IBM has any right under the said agreements and denies the
remaining allegations of ¶79 not specifically admitted herein.
80. Denies the allegations of ¶80.
81. Denies the allegations of ¶81.
82. Denies the allegations of ¶82.
83. Denies the allegations of ¶83.
84. Repeats and realleges ¶¶ 1-83, above.
85. Admits that IBM sells Linux-related services in interstate commerce,
but denies that IBM has or had authority to sell, license or distribute
AIX in interstate commerce from and after June 16, 2003 , and denies
that IBM has or had authority to license, sell or distribute Dynix
in interstate commerce from and after September 2, 2003, alleges that
IBM's rights in AIX and Dynix have been lawfully and properly
terminated, and denies the remaining allegations of ¶85 not specifically
admitted herein.
86. Denies the allegations of ¶86.
87. Denies the allegations of ¶87.
88. Denies the allegations of ¶88.
89. Denies the allegations of ¶89.
90. Repeats and alleges ¶¶ 1-89, above.
91. Admits that IBM has expended a substantial investment of time,
effort, and money in development o f AIX pursuant to the terms of its
license with SCO and SCO's predecessors in interest, admits that AIX has
become one of the world's leading UNIX operating systems, admits that
IBM's products and services are sold and used throughout the United
States, admits that IBM acquired Sequent and thereby acquired Sequent's
interest in Dynix, subject to the terms and conditions of Sequent's
agreements with SCO and/or its predecessors, but denies the remaining
allegations of ¶91 not specifically admitted herein.
92. Denies the allegations of ¶92.
93. Denies the allegations of ¶93.
94. Denies the allegations of ¶94.
95. Repeats and realleges ¶¶ 1-94, above.
96. Admits the allegations of ¶96.
97. Admits it is generally aware that IBM has or may have certain
prospective business relationships that IBM deems important, but denies
the remaining allegations of ¶97 not specifically admitted herein.
98. Denies the allegations of ¶98
99. Denies the allegations of ¶99.
100. Denies the allegations of ¶100.
101. Repeats and realleges ¶¶ 1-100, above.
102. Denies the allegations of ¶102.
103. Denies the allegations of ¶103.
104. Denies the allegations of ¶104.
105. Denies the allegations of ¶105.
106. Denies the allegations of ¶106.
107. Repeats and realleges ¶¶ 1-106, above.
108. Admits that IBM has made contributions of source code to Linux
under the GPL, but denies the applicability or enforceability of the GPL
and denies the remaining allegations of ¶108 not specifically admitted
herein.
109. Denies the allegations of ¶109.
110. Denies the allegations of ¶110.
111. Denies the allegations of ¶111.
112. Denies the allegations of ¶112.
113. Repeats and realleges ¶¶ 1-112, above.
114. Denies the allegations of ¶114.
115. Denies the allegations of ¶115.
116. Denies the allegations of ¶116.
117. Denies the allegations of ¶117.
118. Denies the allegations of ¶118.
119. Repeats and realleges ¶¶ 1-118, above.
120. Admits that IBM made contributions of source code to Linux under
the GPL, but denies the applicability or enforceability of the GPL,
alleges that part of said contributions by IBM violate SCO's contract
and intellectual property rights, and denies the remaining allegations
of ¶120 not specifically admitted herein.
121. Is without information sufficient to admit or deny the allegations
of ¶121, and therefore denies the same.
122. Admits that IBM placed copyright notices on certain of its AIX and
Dynix contributions to UNIX, but denies it has the legal authority to do
so, denies the applicability or enforceability of the GPL, and denies
the remaining allegations of ¶122 not specifically admitted herein.
123. Denies the allegations of ¶123.
124. Denies the allegations of ¶124.
125. Denies the allegations of ¶125.
126. Denies the allegations of ¶126.
127. Repeats and realleges ¶¶ 1-126, above.
128. Is without information sufficient to admit or deny the allegations
of ¶128, and therefore denies the same.
129. Denies the allegations of ¶129.
130. Denies the allegations of ¶130.
131. Denies the allegations of ¶131.
132. Denies the allegations of ¶132.
133. Repeats and realleges ¶¶ 1-132, above.
134. Is without information sufficient to admit or deny the allegations
of ¶134, and therefore denies the same.
135. Denies the allegations of ¶135.
136. Denies the allegations of ¶136.
137. Denies the allegations of ¶137.
138. Denies the allegations of ¶138.
139. Repeats and realleges ¶¶ 1-139, above.
140. Is without information sufficient to admit or deny the allegations
of ¶140, and therefore denies the same.
141. Denies the allegations of ¶141.
142. Denies the allegations of ¶142.
143. Denies the allegations of ¶143.
144. Denies the allegations of ¶144.
145. Repeats and realleges ¶¶ 1-144, above.
146. Is without information sufficient to admit or deny the allegations
of ¶146, and therefore denies the same.
147. Denies the allegations of ¶147.
148. Denies the allegations of ¶148.
149. Denies the allegations of ¶149.
150. Denies the allegations of ¶150.
151. Repeats and realleges ¶¶ 1-150, above.
152. Denies the allegations of ¶152.
153. Denies the allegations of ¶153.
154. Denies the allegations of ¶154.
155. Denies the allegations of ¶155.
156. Denies the allegations of ¶156.
FIRST AFFIRMATIVE DEFENSE
IBM fails to state a claim upon which relief may be granted.
SECOND AFFIRMATIVE DEFENSE
IBM's claims re barred by the doctrines of waiver, estoppel,
acquiescence, and/or latches.
THIRD AFFIRMATIVE DEFENSE
IBM's contractual right to license, distribute or use AIX or Dynix has
been properly and validly terminated, and any claim based thereon is barred.
FOURTH AFFIRMATIVE DEFENSE
IBM's claims are barred by license.
FIFTH AFFIRMATIVE DEFENSE
IBM's claims are barred by illegality, collusion, conspiracy and/or lack
of clean hands.
SIXTH AFFIRMATIVE DEFENSE
The General Public License ("GPL") is unenforceable, void and/or
voidable, and IBM's claims therein, or related thereto, are barred.
SEVENTH AFFIRMATIVE DEFENSE
The GPL is selectively enforced by the Free Software Foundation such
that enforcement of the GPL by IBM or others is waived, estopped or
otherwise barred as a matter of equity.
EIGHT AFFIRMATIVE DEFENSE
The GPL violates the U.S. Constitution, together with copyright,
antitrust and export control laws, and IBM's claims based thereon, or
related thereto, are barred.
NINTH AFFIRMATIVE DEFENSE
IBM's claims are barred, in whole or in part, by the First Amendment to
the U.S. Constitution, by the doctrine of judicial immunity and by
privilege.
TENTH AFFIRMATIVE DEFENSE
IBM lacks standing to assert these claims.
ELEVENTH AFFIRMATIVE DEFENSE
IBM's claims are barred or preempted, in whole or in part, by the laws
of the United States.
TWELFTH AFFIRMATIVE DEFENSE
IBM's own conduct, including that of its agents, contractors and
partners, and/or conduct of third parties constitute superseding or
intervening causes with respect to IBM's claims of damage or injury.
THIRTEENTH AFFIRMATIVE DEFENSE
SCO has acted legally and properly at all relevant times and IBM is
therefore barred from any relief whatsoever.
FOURTEENTH AFFIRMATIVE DEFENSE
IBM's purported copyright registrations are invalid and/or IBM has
violated copyright laws in respect to its claims alleged and the claims
based on, or related to, copyrights are barred.
FIFTEENTH AFFIRMATIVE DEFENSE
IBM is not, or may not be, the owner of the '746, '211, '209, or '785
Patents at issue.
SIXTEENTH AFFIRMATIVE DEFENSE
The patents at issue, and particularly the claims of those patents
alleged to be infringed, are invalid and of no effect for failure to
comply with one or more requirements set forth in Title 35 of the United
States Code, including, but not limited to Sections 101, 102, 103, 112,
116, and/or 256.
SEVENTEENTH AFFIRMATIVE DEFENSE
On information and belief, IBM's claims under the patents at issue are
precluded by the doctrine of prosecution history estoppel based on the
admissions and representations made by IBM in proceedings before the
United States Patent and Trademark Office during the prosecution of the
applications of the patents at issue.
EIGHTEENTH AFFIRMATIVE DEFENSE
On information and belief, U.S. Patent 4,814,746 ("the '746 patent") is
unenforceable by reason of IBM's inequitable conduct, acts or omissions
before the U.S. Patent and Trademark Office ("PTO"). The '746 patent,
in the section entitled "Background of the Invention," cites one article
directed to LZ78 data compression and indicates that it is
representative of the prior art. U.S. Patent No. 4,814,746, column 1,
lines 13-27. That statement is material, false and misleading and was
known by IBM to be material, false and misleading. In fact, the single
article cited in the '746 patent is not representative of the prior
art. There are numerous other techniques such as LZ77, described in an
article entitled "A Universal Algorithm For Sequential Data
Compression," IEEE Transactions on Information Theory, Vol. IT-23, No.
3, May 1977, pp. 337-343. Other types of prior art data compression
methods include run length encoding, arithmetic encoding and Huffman
encoding. The falsity of IBM's statements is also reflected by the fact
that in the period from December 9, 1975, to March 1, 1983, IBM itself
obtained the issuance of at least 31 patents directed to data compression.
On September 22, 1988, during prosecution of the continuation patent
application which led to issuance of the '746 patent, IBM filed an
Information Disclosure Statement ("IDS") with the PTO. That IDS
disclosed European Patent Office ("EPO") patent publication 129439. The
inventor of that patent publication was Terry Welch. The patent
publication was published on December 27, 1984. Inexplicably, while IBM
mentioned the United States counterpart of the EPO publication, it did
not cite that counterpart in the citation of prior art. Thus, the face
of the '746 patent does not contain any reference to the U.S.
counterpart. That counterpart was U.S. Patent No. 4,558,302. That
patent contains claims which overlap with the '746 patent. The Welch
U.S. Patent No. 4,558,302 was filed 19 days after the '746 patent was
filed in the PTO. The closeness of these dates implicates 35 U.S.C. §
102(g) and raises serious question as to who was the first inventor of
the claimed subject matter and who is entitled to the patent. The
failure to cite the U.S. counterpart, the fact that IBM waited almost
three years after the U.S. counterpart issued as a patent to even inform
the PTO of the EPO publication, and the additional fact that IBM waited
until after the claims of the '746 patent were allowed to file an IDS,
were intended to deter the Patent Examiner from comparing the claims of
the U.S. counterpart to the allowed claims of the '746 patent. These
actions were material to the examination of the '746 patent.
IBM's IDS states that the U.S. counterpart patent "apparently is an
improvement on the teaching of [another reference] and offers nothing
more that would affect the patentability of the allowed claims in this
case. ["] These statements were material, false and misleading and were
known by IBM to be material, false and misleading. These statements and
the fact that IBM cited the EPO publication and not the U.S. patent
counterpart had the effects of not only mischaracterizing the disclosure
of the Welch patent application, but also of concealing from the PTO the
overlap between the claimed subject matter of the '746 patent and the
counterpart U.S. patent.
IBM withheld additional prior art from the PTO. In February, 1981, IBM published an article entitled "Message Compression Method." The article was published as an IBM Technical Disclosure Bulletin, Volume 23, No. 9, pages 4197-98. That publication was material to the patentability of the '746 patent. IBM withheld this prior art with intent to deceive the PTO.
On information and belief, IBM was aware prior to the issuance of the '746 patent, of U.S. Patent No. 4,366,551, issued December 28, 1982, to Klaus E. Holz. This patent is material to the patentability of the claims of the '746 patent. On information and belief, IBM's intentional failure to disclose this prior art to the PTO was part of IBM's scheme to withhold material prior art.
On information and belief, U.S. Patent 5,805,785 ("the '785 patent") is unenforceable by reason of IBM's inequitable conduct, acts or omissions before the PTO. The '785 patent, entitled "Method for Monitoring and Recovery of Subsystems in a Distributed/Clustered System," was filed on February 27, 1996, listing as joint inventors Daniel Manuel Dias, Richard Pervin King, and Avraham Leff. Applicants also filed an IDS on this date. The IDS listed 12 references that are all U.S. patents. No other references, including technical papers authored by one or more of the joint inventors were listed. A review of papers authored by the three inventors reveals several that are material to patentability. In particular, Avraham Leff's Ph.D dissertation, entitled "A Dynamic and Decentralized Approach to Management of CPU and Memory," published at Columbia University in 1992, is material to the patentability of the '785 patent application. The dissertation describes a system of resource management that does not require a centralized coordinator. Sites cooperate in transmitting important state information to each other. Decisions made at one site are then factored by other sites into subsequent decisions. Because this dissertation was material to the patentability of the '785 patent application, the dissertation should have been disclosed to the PTO during prosecution of the '785 patent application. IBM withheld this reference with the intent to deceive the PTO.
Inventor Daniel M. Dias appears as joint author on three papers that relate directly to the subject matter claimed in the '785 patent. These three papers appear to have been published at about the same time as the '785 patent filing date of February, 1996. All three papers list joint authors, none of whom, other than Mr. Diaz, appears as an inventor on the '785 patent. "A Scalable and Highly Available Web Server," published in Proceedings of COMPCON '96, lists as authors, in addition to Mr. Dias, William Kish, Rajat Mukherjee, and Renu Tewari. "High Availability in Clustered Multimedia Servers," published in Proceedings -- International Conference on Data Engineering 1996, lists as authors, in addition to Mr. Dias, Renu Tewari, Rajat Mukherjee, and Harrick Vin. "Design and Performance Tradeoffs in Clustered Video Servers," published in Proceedings -- International Conference on Multimedia Computing and Systems 1996, lists as authors, in addition to Mr. Dias, Renu Tewari, Rajat Mukherjee, and Harrick Vin. All three of these papers describe concepts that can be found in the '785 patent claims, and thus Messrs. Kish, Mukherjee, Tewari, and Vin should have been listed as inventors on the '785 patent. IBM's decision not to list Messrs. Kish, Mukherjee, Tewari, and Vin as inventors on the '785 patent was with the intent to deceive the PTO.
U.S. Patent 5,129,080 ('[sic] the '080 patent"), entitled "Method and System Increasing the Operational Availability of a System of Computer Programs Operating in a Distributed System of Computers," filed October 17, 1990, issued July 7, 1992, and assigned to IBM, is material to patentability of the '785 patent, and should have been disclosed by IBM to the PTO. In particular, the '080 patent discloses high availability architectures, cooperative processing among nodes of a computer network, and fault recovery techniques. The '080 patent also discloses sharing of state information among the computer network nodes and global and local management. Because the '080 patent is material to patentability of the '785 patent application, the '080 patent should have been disclosed to the PTO during prosecution of the '785 patent application. IBM withheld this reference with the intent to deceive the PTO.
On information and belief, U.S. Patent 4,821,211 ("the '211 patent") is unenforceable by reason of IBM's inequitable conduct, acts or omissions before the PTO. The '211 patent was filed on November 19, 1987 and issued April 11, 1989. During prosecution of the '211 patent application, Applicants did not disclose any prior art references to the PTO through filing an IDS. On information and belief, Applicants were aware of prior art references that were material to patentability of the '211 patent, and which, therefore, were required to be disclosed to the U.S. Patent and Trademark Office.
More specifically, U.S. Patent 4,688,181 to Cottrell et al. ("the '181 patent"), filed April 30, 1986 and issued August 18, 1987, and assigned to IBM was material to the patentability of the '211 patent, but was not disclosed to the PTO. The '181 patent was cited by the patent examiner during prosecution of the '211 patent. Further, the '181 patent listed a number of prior art references that were themselves material to patentability of the '211 patent. These additional prior art references were not disclosed to the PTO during prosecution of the '211 patent. One of the prior art references cited during the Cottrell patent application prosecution is U.S. Patent 4,613,946 to Forman ("the '946 patent"). That patent was also material to the patentability of the '211 patent. Thus the '946 patent, and the other references cited during prosecution of the Cottrell patent application should have been disclosed to the PTO by IBM. IBM withheld these material references with the intention to deceive the PTO.
On information and belief, IBM was aware of other references that were material to the patentability of the '211 patent, and with deceptive intent, IBM did not disclose these references to the PTO. For example, U.S. Defensive Publication T980,008 ('[sic]the '008 publication"), entitled "Interactive Design of Character-Recognition Logics," filed July 19, 1976, published March 6, 1979, and assigned to IBM, is material to the patentability of the '211 patent, and should have been disclosed by IBM to the PTO. The '008 publication discloses generating graphic display of pattern locations and a menu of operations. The '008 publication also discloses using auxiliary operations in the menu to modify the sequence of input patterns. Because the '008 publication is material to the patentability of the '211 patent, the '008 publication should have been disclosed to the PTO during prosecution of the '211 patent. IBM withheld this reference with intent to deceive the PTO.
Other references of which IBM was aware and that were required to be disclosed to the PTO include U.S. Patent 4,731,606 to Bantz et al. ("the '606 patent["]), filed August 2, 1985 and issued March 15, 1988 and U.S. Patent 4,719,571 to Rissanen et al. ("the 571 patent"), filed March 5, 1986 and issued January 12, 1988, both assigned to IBM. Both the '606 patent and the '571 patent are material to patentability of the '211 patent, and both should have been disclosed to the PTO during prosecution of the '211 patent. IBM withheld these references with the intent to deceive the U.S. Patent and Trademark Office.
On information and belief, U.S. Patent 4,953,209 ("the '209 patent") is unenforceable by reason of IBM's inequitable conduct, acts or omissions before the PTO. The '209 patent, entitled "Self-verifying Receipt and Acceptance system for Electronically Delivered Data Objects," was filed on October 31, 1988. The '209 patent, in the section entitled "Background of the Invention," describes only two prior art references: U.S. Patent No. 4,757,533 to Allen et al. and U.S. Patent No. 4,757,534 ("the '534 patent") to Stephen M. Matyas et al.
The '534 patent is assigned to IBM. Stephen M. Matyas, co-inventor of the '534 patent, is listed as an author of more than 100 IBM publications related to cryptography or data encryption. Mr. Matyas is also listed as an inventor on more than 70 issued patents in this field. Mr. Matyas is well known in the field of cryptography and data encryption at IBM. When the '209 patent application was filed, IBM knew that some of Mr. Matyas' activities were material to the patentability of the '209 patent. However, as noted above, only the '534 patent was listed. IBM failed to cite other material prior art references associated with Mr. Matyas, including, for example, U.S. Patent 4,203,166 ("the '166 patent") in which Mr. Matyas is listed as an inventor. The '166 patent, entitled "Cryptographic File Security for Multiple Domain Networks," filed December 5, 1977, issued May 13, 1980, and assigned to IBM, is material to patentability of the '209 patent, and should have been disclosed by IBM to the PTO.
The '166 patent discloses a file security system for data files created at a first host system in one domain and recovered at a second host system in another domain of a multiple domain network. Specifically, the '166 patent discloses,[sic] a first host system that provides a file recovery key for subsequent recovery of a data file at a second host system. The first host system enciphers (modifies) the first host system plaintext to obtain first host system ciphertext as the data file. The file recovery key is used as header information for the data file. When the data file is to be recovered at the second host system, the file recovery key is provided at the second host system and the second host system transforms the file recovery key into a form, which is usable to decipher the data file. The second host system uses the transformed file recovery key to perform a cryptographic operation to obtain the first host system ciphertext in clear form (unmodified) at the second host system. Thus, the '166 patent is material to the patentability to the claims of the '209 patent. Because the '166 patent is material to the patentability of the '209 patent, the '166 patent should have been disclosed to the PTO during prosecution of the '209 patent. IBM withheld this reference with the intention to deceive the PTO.
IBM also failed to cite U.S. Patent 4,238,854 ("the '854 patent") in which Mr. Matyas is again listed as an inventor. The '854 patent, entitled "Cryptographic File Security for Single Domain Networks," filed December 5, 1977, issued December 9, 1980, and assigned to IBM, is material to patentability of the '209 patent, and should have been disclosed by IBM to the PTO. The '854 patent was filed concurrently with the '166 patent described above.
The '854 patent discloses that an operational key enciphered under the file key of the designated storage media, as header information, together with the host data enciphered under the operational key is written on the storage media as an enciphered data file. When the data file is recovered, the host data security device transforms the enciphered operational key header information under control of a host master key into a form which permits the operational key to be used for deciphering the enciphered data file to obtain the file data in clear form. Thus, the '854 patent is material to the patentability to the claims of the '209 patent. Because the '854 patent is material to the patentability of the '209 patent, the '854 patent should have been disclosed to the PTO during prosecution of the '209 patent. IBM withheld this reference with the intention to deceive the PTO.
Matyas is also one of the authors of an article entitled "Cryptographic Key Authentication in Communication System" published by IBM in March, 1978. The article was published as an IBM Technical Disclosure Bulletin, March 1978, pages 3990-92. This publication discloses that message communication protection is obtained by enciphering a clear data message X at a host under control of a working key KS to yield a ciphered data message Y. At the receiving terminal, the enciphered data message Y is deciphered under control of the working key KS to yield the clear data message X.
Another article in which Matyas is an author is entitled "Terminal Control of Encipher and Decipher Data Operations" published by IBM in August, 1981. The article was published as an IBM Technical Disclosure Bulletin, August, 1981, pages 1334-1339..[sic] This publication discloses that in communication security applications where data is to be transmitted in a cryptographic session, between a host unit and a remote terminal controller unit, a data encrypting session key (KS) is required to be established in a form suitable for use at each unit. Data may then be enciphered under KS at one unit and transmitted to the other unit where it is deciphered under KS.
Thus, the above publications, published as IBM Technical Disclosure Bulletins, are material to the patentability to the claims of the '209 patent. Because these publications are material to the patentability of the '209 patent, these articles should have been disclosed to the PTO during prosecution of the '209 patent. IBM withheld these references with the intention to deceive the PTO.
The foregoing actions constitute inequitable conduct and render the claims of the '746, '785, '211, and '209 patents unenforceable. Discovery in this proceeding is ongoing, and additional acts of inequitable conduct will be added to this defense at the appropriate time.
NINTEENTH AFFIRMATIVE DEFENSE
SCO has not infringed, literally or under the doctrine of equivalents, any valid or enforceable claim of the '746, '211, '209 and '785 Patents.
TWENTIETH AFFIRMATIVE DEFENSE
On information and belief, IBM failed ot mark patent articles covered by the '746, '211, '209 and/or '785 Patents at issue in the counterclaims. Any claim for damages is therefore limited by 35 U.S.C. §287.
TWENTY FIRST AFFIRMATIVE DEFENSE
On information and belief, IBM failed to provide SCO with actual notice of IBM's allegations of infringement of the patents at issue, and therefore IBM cannot recover any damages for SCO's actions before the filing of IBM's counterclaims.
TWENTY SECOND AFFIRMATIVE DEFENSE
IBM has not and cannot plead and meet the requirements for an award of enhanced damages or attorneys' fees.
TWENTY THIRD AFFIRMATIVE DEFENSE
SCO has an express or implied license to practice some or all of the claims embodied in the patents at issue.
TWENTY FOURTH AFFIRMATIVE DEFENSE
Upon information and belief, IBM lacks standing to assert that SCO infringed some or all of the patents at issue.
TWENTY FIFTH AFFIRMATIVE DEFENSE
SCO states that IBM's request for treble damages and attorneys fees is barred because SCO acted in good faith, and this is not an exceptional case within the meaning of the Patent Code.
TWENTY SIXTH AFFIRMATIVE DEFENSE
IBM has failed to join one or more parties needed for just adjudication of the counterclaims, including but not limited to the Free Software Foundation and contributors to the Linux 2.4 and 2.5 kernels.
WHEREFORE, having fully answered IBM's amended counterclaims, SCO prays for dismissal with prejudice of all claims, or in the alternative judgment in its favor thereunder, together with attorneys' fees and costs, and together with all other legal and equitable relief deemed just and proper by this Court.
JURY DEMAND
SCO demands trial by jury on all issues raised in IBM's amended counterclaims that are so triable.
DATED THIS 11th day of March, 2004
By: [signature of Brent O. Hatch]
HATCH, JAMES & DODGE
Brent O. Hatch
Mark F. James
BOIES, SCHILLER & FLEXNER
Stephen N. Zack
Mark J. Heise
Attorneys for the SCO Group, Inc.
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