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IBM's Unopposed Motion for Leave to File Amended Counterclaims - as text
Tuesday, March 30 2004 @ 11:57 PM EST

Here is IBM's Unopposed Motion for Leave to File Amended Counterclaims. This is the meat of what IBM is saying:

"In its Second Amended Complaint, SCO abandons any claim that IBM misappropriated SCO's trade secrets, but SCO adds four counts to its case. Most notably, SCO's new pleading changes the theory and scope of its case by adding claims that (1) IBM is infringing the copyrights SCO purports to own concerning certain Unix operating system software (Count 5); and (2) IBM improperly interfered with a contract between SCO and Novell, Inc. (Count 8).

"In response, IBM seeks to: (1) add claims for declaration of noninfringement of copyright; (2) add additional allegations to its present claim for copyright infringement; (3) based on its continuing investigation, drop one of its claims of patent infringement; and (4) otherwise update its factual allegations."

So that's the why of it. SCO said they were adding copyright infringement claims, but they were actually contract-related, so IBM is calling their bluff, taking the matter out of the carefully limited contracts-related area that SCO tried to draw, and basically telling SCO to prove they have any copyrights to infringe. IBM isn't positive if it needs to ask permission of the court to amend its counterclaims, but it respectfully requests permission, and they say SCO does not oppose. They also point out that it would not be fair for SCO to put in new charges, the allegations of copyright infringement, and not allow IBM to respond.

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

SNELL & WILMER, L.L.P.
Alan L. Sullivan (3152)
Todd M. Shaughnessy (6651)
[address]
[phone]
[fax]

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

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,

vs.

INTERNATIONAL BUSINESS
MACHINES CORPORATION,

Defendant/Counterclaim- Plaintiff.

_____________________________________

DEFENDANT/COUNTERCLAIM-
PLAINTIFF IBM'S UNOPPOSED MOTION
FOR LEAVE TO FILE AMENDED
COUNTERCLAIMS

Civil No. 2:03CV0294DAK

Honorable Dale A. Kimball
Magistrate Judge Brooke Wells

_______________________________________

Pursuant to Rules 15(a) and 16(b) of the Federal Rules of Civil Procedure, Defendant/Counterclaim-Plaintiff International Business Machines Corporation ("IBM"), through its undersigned counsel, submits this Motion for Leave to File Amended Counterclaims.

On the last day to amend pleadings, SCO submitted a motion to amend its complaint against IBM (for a second time) and to amend its answer to IBM's counterclaims. Without objection by IBM, the Court granted SCO's motion, and SCO submittted its Second Amended Complaint on February 27, 2004, and its Amended Answer on March 11, 2004.

In its Second Amended Complaint, SCO abandons any claim that IBM misappropriated SCO's trade secrets, but SCO adds four counts to its case. Most notably, SCO's new pleading changes the theory and scope of its case by adding claims that (1) IBM is infringing the copyrights SCO purports to own concerning certain Unix operating system software (Count 5); and (2) IBM improperly interfered with a contract between SCO and Novell, Inc. (Count 8).

In response, IBM seeks to: (1) add claims for declaration of noninfringement of copyright; (2) add additional allegations to its present claim for copyright infringement; (3) based on its continuing investigation, drop one of its claims of patent infringement; and (4) otherwise update its factual allegations.

Insofar as the claims IBM seeks to assert are responsive to SCO's new pleading, IBM would ordinarily be entitled to submit them as of right. See Fed. R. Civ. P. 15(a); 3 James W. Moore, et al., Moore's Fed. Prac. § 15.17[6] (3d ed. 1999) ("[W]hen a plaintiff's amended complaint changes the theory of the case, it would be inequitable to require leave of court before the defendant could respond with appropriate counterclaims."); Trailon Corp.v. Cedarapids, Inc., 966 F. Supp. 812, 832 (N.D. Iowa 1997) (holding that defendant "was entitled to a 'fresh start' in answering Plaintiff's Second Amended Complaint" because "it would be inequitable to entertain the Plaintiff's Second Amended Complaint without permitting [defendant] to completely plead anew").

Since SCO's Second Amended Complaint and Amended Answer were not filed until after the deadline to amend pleadings, however, there is some uncertainty as to whether leave of the court is required for IBM to amend its counterclaims in response to SCO's new pleading. While we do not believe that leave of court should be required, IBM hereby respectfully requests leave to amend its counterclaims.

A request to amend the pleadings after the expiration of the scheduling order deadline should be granted (1) for good cause shown; and (2) where the requirements of Rule 15(a) are satisfied. See Pumpco, Inc. v. Schenker Int'l, Inc., 204 F.R.D. 667, 668 (D. Colo. 2001). Good cause exists where the movant can show "good faith on its part and some reasonable basis for not meeting the deadline".1 See Deghand v. Wal-Mart Stores, Inc., 904 F. Supp. 1218, 1221 (D. Kan. 1995). Leave to amend is "freely given" under Rule 15(a) when justice so requires.2 See Foman v. Davis, 371 U.S. 178, 182 (1962).

There is good cause to permit IBM to amend its counterclaims, and leave to amend should be freely given, because: (1) the proposed amended counterclaims are responsive to claims filed by SCO after the deadline to amend pleadings; (2) IBM did not have all of the information on which the amended counterclaims are based until very recently; (3) the amended counterclaims are brought in good faith and without a dilatory purpose; (4) IBM did not previously have sufficient opportunity to include the proposed new allegations; and (5) the filing of the amended counterclaims will not result in undue prejudice to anyone and is in the interests of justice.

Undersigned counsel hash conferred with counsel for SCO regarding this motion, and counsel for SCO has stated that SCO does not oppose the filing of the proposed amended counterclaims, subject only to its right to respond to the amended counterclaims in the ordinary course (i.e., by answer or motion to dismiss).

For the foregoing reasons, IBM respectfully requests that this Court permit IBM to amend its counterclaims as set forth in the proposed pleading attached hereto.

DATED this 26th day of March, 2004.

  SNELL & WILMER L.L.P.

  (signature)  
Alan L. Sullivan
Todd M. Shaughnessy


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


Attorneys for Defendant/Counterclaim-Plaintiff
International Business Machines Corporation

Of counsel:

MORGAN & FINNEGAN LLP
Christopher A. Hughes
Richard Straussman
[address]
[phone]


INTERNATIONAL BUSINESS MACHINES CORPORATION
Donald J. Rosenberg
Alec S. Berman
[address]
[phone]


Attorneys for Defendant/Counterclaim-Plaintiff International
Business Machines Corporation

CERTIFICATE OF SERVICE

I hereby certify that on the 26th day of March, 2004, a true and correct copy of the foregoing DEFENDANT/COUNTERCLAIM-PLAINTIFF IBM'S UNOPPOSED MOTION FOR LEAVE TO FILE AMENDED COUNTERCLAIMS was hand delivered to the following:

Brent O. Hatch
HATCH, JAMES & DODGE, P.C.
[address]


and sent by U.S. Mail, postage prepaid, to the following:

Stephen N. Zack
Mark J. Heise
BOIES, SCHILLER & FLEXNER LLP
[address]


Kevin P. McBride
[address]

(signature)


1 Courts routinely find 'good cause' where, as here, recently discovered information gives rise to the proposed amendments. See Pumpco, 204 F.R.D. at 669 (good cause shown where "plaintiff has pointed to new information recently discovered or disclosed which forms the bases for the additional claims"); Deghand, 904 F. Supp. at 1222 (good cause shown where plaintiff recently discovered a letter supporting new claims).

2 In Las Vegas Ice and Cold Storage Co. v. Far West Bank, 893 F.2d 1182, 1185 (10th Cir. 1990), the Tenth Circuit described the factors relevant in granting leave to amend. Courts in the Tenth Circuit consider whether: (1) the amendment will result in undue prejudice; (2) the request was unduly and inexplicably delayed; (3) the amendment was offered in good faith; (4) the party had sufficient opportunity to state a claim and failed; and (5) the party seeking amendment knows or should have known of the relevant facts at the time of the original complaint. Id.


  


IBM's Unopposed Motion for Leave to File Amended Counterclaims - as text | 22 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Mistakes, Typos Here
Authored by: PJ on Wednesday, March 31 2004 @ 12:13 AM EST
Please immortalize my mistakes here, so I can find them quickly. Thank you.

[ Reply to This | # ]

Leave to File Amended Counterclaims - admirable display of tact
Authored by: Ed L. on Wednesday, March 31 2004 @ 12:59 AM EST
They also point out that it would not be fair for SCO to put in new charges, the allegations of copyright infringement, and not allow IBM to respond.
Since Judge Wells not doubt remembers anyway, it would have been tactless for IBM to point out that their agreement to allow SCO's 2nd Claims Amendment was qualified in the sense that IBM did, of course, reserve the right to respond to SCO's amended complaint.

---
"Proprietary software is harmful, not because it is a form of competition, but because it is a form of combat among the citizens of our society." (RMS)

[ Reply to This | # ]

OT: SCOs latest company news on Nasdaq
Authored by: Anonymous on Wednesday, March 31 2004 @ 01:48 AM EST
Link: Company News - SCO

Shows a little about their cooperation with Microsoft, and they tell about how the solution among other things protect the "IBM Air Crew Statistics".

--------------------------------------

The Ministry of Defence Protects Its Users With Vintela(TM) Authentication From SCO(R)

... As a result, Vintela Authentication from SCO now secures the MoD's Tarantella GP9, IBM Air Crew Statistics and Spirent Systems WRAM applications.

...

About Vintela Authentication

Vintela Authentication is featured as part of Microsoft's Solution Guide for Windows Security and Directory Services for UNIX and is recognized for implementing Kerberos and LDAP functionality in a heterogeneous environment that can fully integrate with Active Directory.

[ Reply to This | # ]

IBM's Unopposed Motion for Leave to File Amended Counterclaims - as text
Authored by: dan_d on Wednesday, March 31 2004 @ 08:18 PM EST
They also point out that it would not be fair for SCO to put in new charges, the allegations of copyright infringement, and not allow IBM to respond.

This seems entirely fair and logical, but I'm confused: I thought the deadline for both parties to amend their claims had already passed. Did IBM also file a motion to amend at that time?

[ Reply to This | # ]

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