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.
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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.
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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
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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.
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