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SCO's Memo in Support of its Expedited Motion to Enforce the Scheduling Order - text - Updated
Monday, September 13 2004 @ 06:34 PM EDT

We were wondering what SCO's motion to enforce the scheduling order would be about. Well, here it is, SCO's Memorandum in Support of SCO's Expedited Motion to Enforce the Court's Amended Scheduling Order Dated June 10, 2004. What they want is for IBM's motions for summary judgment to be put on hold until discovery is scheduled to be complete, in February.

In a word, they are terrified. They would prefer that their ship sink into the sea in February instead of September. I don't know. The water is a lot colder in February.

So, they want more DELAY. What else doees SCO ever ask for? AIX? Well, yes. They ask for that too. In short, they have found a way to respond to IBM's motions more than once apiece. This motion answers and they get to reply to all the motions too.

I have only skimmed it, so I'll write some more about this after I have time to evaluate it, but in the meantime, we can read it together. Note that IBM's memorandum in support of its motion for partial summary judgment on SCO's breach of contract claims, as text in the article just before this one, has references to and quotations from the AT&T and IBM executives mentioned in this SCO document.

Update: This document was unsealed [PDF] about a year later, and the only redacted section, on page 22 of the document, or 24 of the PDF, reads like this:

Email from Bill Sandve to Kim Tran, January 22, 2002 at 2 (Exh. 4) (“AIX was derived from System V.”); Agreement for Licensing of AIX Source Code and Related Products between Argus Systems Group, Inc. and IBM ¶ 8.4 (Exh. 5) (“AIX is derived form software under license from SCO.”); International Business Machines Corp. Royalty Statement, June 30, 1987 (Exh. 6) (stating that AIX is “derived from System V”); IBM/Supplier Technical Services Agreement at 1 (Exh. 7) (“‘AIX Operating System’ or ‘AIX’ shall mean the UNIX operating system that operates on the Power, Power PC, Power 2, Power 3, and Power 4 architectures or derivatives or follow-on architectures irrespective of the names of such architecture.” (emphasis added)); Rodgers Dep. 138 (Exh. 8) (“Dynix/ptx is almost certainly a derivative work of Unix System V.”)
Don't ask me why they'd redact that portion, unless perhaps they were afraid Groklaw would explain what derived from means with regard to AIX and how Dynix/ptx came to be.

There were exhibits attached as well, some of which were later made available as well. You can find them all, the ones publicly available, on Groklaw's IBM Timeline page, under docket number 292.

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

Brent O. Hatch (5715)
Mark F. James (5295)
HATCH, JAMES & DODGE
[address, phone, fax]

Robert Silver (admitted pro hac vice)
BOIES, SCHILLER & FLEXNER
[address, phone, fax]

Stephen N. Zack (admitted pro hac vice)
Mark J. Heise (admitted pro hac vice)
BOIES, SCHILLER & FLEXNER LLP
[address, phone, fax]

Attorneys for The SCO Group, Inc.

____________________________

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH

____________________________

THE SCO GROUP,

Plaintiff/Counterclaim-Defendant

v.

INTERNATIONAL BUSINESS
MACHINES CORPORATION,

Defendant/Counterclaim-Plaintiff

____________________________

MEMORANDUM IN SUPPORT OF
SCO’S EXPEDITED MOTION TO
ENFORCE THE COURT’S AMENDED
SCHEDULING ORDER DATED JUNE
10, 2004

Case No. 2:03CV0294DAK
Honorable Dale A. Kimball
Magistrate Judge Brooke C. Wells

_____________________________

Plaintiff The SCO Group, Inc. (“SCO”) respectfully submits this memorandum in support of its expedited motion to enforce the Court’s Amended Scheduling Order dated June 10, 2004. SCO hereby requests that the Court defer the scheduling and adjudication of any dispositive motions until after the end of the Court’s fact-discovery period, which the Amended Scheduling Order extended to February 11, 2005.

PRELIMINARY STATEMENT

IBM has now filed three fact-intensive dispositive motions, six (or more) months ahead of the Court’s extended fact-discovery cut-off, which purport to cover almost all of the issues in the case. Adjudicating these motions on IBM’s schedule (the motions are now scheduled for hearing on December 9) could not eliminate the need for discovery. Discovery could not be suspended pending disposition of the motions without exposing SCO to the risk of having to resume and complete all discovery within a matter of weeks. Because deferring adjudication of these motions could not sacrifice any case-management efficiency, there is no benefit from adjudicating these motions before the close of fact discovery.

At the same time, there is a great cost associated with from adjudicating these motions now. By coordinating the accelerated timing of these dispositive motions while it continues to block critical discovery, IBM would achieve what this Court’s Amended Scheduling Order – over IBM’s stringent objection – refused to allow IBM to do: force adjudication of this case without adequate opportunity for SCO to develop its proof. IBM’s coordinated motions would thus nullify the Amended Scheduling Order.

Given their content, moreover, IBM’s motions do not have any apparent additional purpose. Although IBM claims there is no issue of disputed fact on what it calls, for example, the dispositive contract issue in the case, IBM asks the Court to rely on the testimony of witnesses who previously gave sworn testimony that directly contradicts their current testimony on this key issue. See pp. 42-59, below. (In fact, what IBM labels SCO’s “New-Found Contract Theory” is the very theory that these same IBM witnesses described under oath more than ten years ago, when they were immersed in the day-to-day issues, and before IBM came to represent them or fund their representation.) This flatly contradictory testimony, which IBM has had for months, obviously precludes any possibility that IBM’s new interpretation – its effort to rewrite history – could be undisputed as a matter of law.

Similarly, while IBM rhetorically claims it is only seeking protection for its “homegrown” and “original” work, IBM asks in the fine print of its contract motion for the right to have copied and otherwise exploited with impunity a seminal, industry-changing innovation in ways that black-letter law would enjoin as misappropriation – before contractual protections are even considered. IBM also claims that SCO’s predecessor AT&T conferred that extraordinary gift even though the IBM and Sequent license agreements that gave IBM and Sequent the right to see and use AT&T’s (and now SCO’s) source code are replete with plain terms that had (and have) no purpose except to prohibit precisely the right to copy and exploit that IBM seeks.

IBM also presents witnesses claiming that AT&T was ready and willing to let IBM and Sequent remove those express terms if they had wanted to, and to ask nothing in return. But IBM also tells the Court that IBM and Sequent nevertheless simply chose not to do so – needlessly (and inexplicably) letting their claimed rights depend on linguistic contortions and extrinsic evidence (presumably including IBM’s ability, as needed, to have witnesses flatly contradict their prior testimony once IBM came to “represent” them).

IBM’s motions are riddled with such errors and overreaching – and thus confirm that through those motions IBM seeks simply to attack the Amended Scheduling Order and to accelerate adjudication of key issues in this case before SCO can obtain, and pursue, Court-ordered discovery that IBM continues to withhold.

The relief SCO proposes would protect this Court’s and the Magistrate Judge’s jurisdiction and orders. SCO shows below that the Court may and should impose such relief in its well-established discretion.

Background and Overview of Issues

In early June, when IBM opposed SCO’s motion to extend the scheduling order, IBM sought to force adjudication at a point where depositions would have had to proceed before IBM had produced much rudimentary discovery, where IBM had only recently produced even a single version of the AIX program at issue in the case (but had held back many critical versions), and where – as a result – dispositive motions would be scheduled to be filed and adjudicated (without such predicate discovery) this fall. In its Amended Scheduling Order, the Court overruled IBM’s position and extended the fact discovery cut-off by over six months, from August 4, 2004, until February 11, 2005.

Since that time, IBM has sought to nullify that Amended Scheduling Order by taking every step to achieve indirectly what the Order prevents IBM from accomplishing directly. SCO has received none of the predicate discovery it was seeking before June 10, including discovery that Magistrate Judge Wells ordered and IBM has now conceded it has not produced. IBM also refuses over Court order to produce even the identities of, and related information about, IBM and Sequent programmers, so as to allow the depositions of such programmers – sixibiblio months into a case about programming. SCO will not receive any such discovery until sometime in the fall and will not be able to use such discovery until later in the year, including much discovery that SCO has shown will contain material reflecting IBM and Sequent’s actual views and thus potential admissions about the contracts at issue – as well as information that IBM’s own declarants made centrally important when they provided prior testimony flatly contradicting what they and IBM now assert.

At the same time, IBM seeks the dismissal of almost every issue in the case, on the ground that SCO (allegedly) cannot produce the evidence it seeks through the discovery that IBM continues to block. IBM asks the Court to adjudicate its motions during the period the original scheduling order, now replaced, provided for such motions. IBM’s coordinated actions would force SCO to proceed with key depositions before being able to access even the basic Court-ordered discovery that IBM continues to withhold. And while IBM expressly asks this Court to rely on the absence of certain evidence, IBM asks the Magistrate Judge in separate filings to block SCO’s access to that very same evidence on the ground that it is “wholly irrelevant.”

IBM has an obvious interest in trying to force SCO to waste its deposition opportunities while IBM holds back other discovery and continues to litigate over Court-ordered discovery that was requested more than a year ago. IBM also has an obvious interest in trying to position the litigation as if the original scheduling order remained in place, while compromising SCO’s ability to use the Court’s extended discovery period to pursue the development of its proof. That is one reason why this Court, through its orders, controls the litigation.

In addition to timing its motions as if the original scheduling order were in place, IBM has taken care to make the return dates for the motions virtually coincide with the date of the hearing before the Magistrate Judge regarding SCO’s outstanding discovery requests – a hearing IBM did not want to occur – as well as with the hearing the next day before this Court on the first of IBM’s dispositive motions. To arrange for this tactical timing, IBM went so far as to serve its contracts motion on SCO’s counsel at his home at 9 p.m. on Friday, August 13 – an otherwise inexplicable act given the fact that IBM was filing its motion approximately six months ahead of the Court’s discovery cut-off. IBM served its dispositive motion on its Eighth Counterclaim on August 16, making it returnable one day after the hearing on IBM’s Tenth Counterclaim Motion.

IBM has since sought to leverage that conduct even further. IBM now asserts that it will agree to “reasonable” (IBM’s word) extensions of time to respond to their motions – but only if SCO agrees to forfeit its right to seek discovery to respond to IBM’s motions. See Letter from T. Shaughnessy to B. Hatch dated Aug. 27, 2004 (Exh. 1).

IBM has thereby tried to force SCO to forfeit the very discovery rights SCO has been seeking to vindicate for over a year – including rights that the Magistrate Judge has upheld in a March 3 Order with which IBM now concedes it has still not complied. Directly following this Court’s Amended Scheduling Order, SCO made clear to IBM that it needed predicate discovery before moving on to the stage of deposition discovery. SCO also made clear that a preliminary deposition plan would have to depend on when disputes were resolved over IBM’s refusal to provide such rudimentary discovery. In submissions filed this summer, SCO has further made clear precisely why it needs this predicate discovery including for the specific purpose of preparing for key contract depositions and the development of its contract case. IBM nevertheless continues to block all of that discovery (just as it did before the Amended Scheduling Order), and continues to contend that SCO should already have had to take its key depositions without access to any such discovery (just as it did before the Amended Scheduling Order).

In fact, IBM contends that SCO should move forward with a deposition plan even though IBM still will not even comply with a Court Order requiring it to simply provide the identities and other ordered basic information about programmers so that such predicate depositions could at least become possible. IBM admits that it possesses this Court-ordered information and has not produced it; IBM even admits that it pointed SCO to sources to obtain this information which did not, in fact, contain the information – a concession SCO had to litigate for months to secure. Yet IBM now has filed a dispositive motion based critically on testimony from witnesses – who when they gave prior contradictory testimony relied on just the kinds of facts about the programming process that those programming depositions would have allowed SCO to establish – but which IBM will not allow to occur, and will not provide the predicate discovery to allow SCO to take effectively.

IBM has likewise held back a repository of potential admissions with respect to issues relating to the scope of contract protections. IBM now tries to force SCO to forfeit its right to seek even the identities of these potential programming deponents, and to forfeit its right to seek a variety of other discovery, all sought (for over a year), simply at the price of securing what IBM admits would be a “reasonable” extension to IBM’s dispositive motions. IBM seeks to extort this forfeiture having first timed the filing of its motions to require responses at the most burdensome possible time for SCO and the most advantageous time for IBM.

In the discovery context here – in which, for example, the parties litigated whether discovery should go forward while IBM sought to hold back discovery, and IBM lost; in which IBM litigated to preserve the Court’s original scheduling order, and IBM lost; and in which IBM sought to schedule the hearings on SCO’s discovery motions in mid-September, and won – IBM now presumes to put SCO in a position where SCO either has to answer IBM’s motions without even a “reasonable” extension of time on the very dates of the discovery hearings IBM sought to avoid, or else waive its rights to seek discovery to answer IBM’s overtly fact-intensive motions. IBM’s efforts thereby to prevent SCO (and the Court) from examining relevant discovery, and to arrogate to itself the Court’s control over this litigation, are plainly improper.

IBM’s proposed course thus presents no benefit, but great cost. This conclusion is only underscored by IBM’s judgment arguments:

IBM’s Motion for Summary Judgment on Its Claim That No Contribution to Linux by Anyone Violates Any SCO Copyright. IBM has moved for summary judgment not only on all potential copyright issues raised in SCO’s claims, but also on a wide range of new copyright issues that IBM has injected into the case. Rather than undertaking any substantive examination of the issues, IBM’s motion seeks to preclude SCO from undertaking such an examination. IBM’s motion, among other things:

  • directly attacks the Court’s Amended Scheduling Order by seeking to impose a discovery cut-off 10 months earlier than the Court’s extended period;

  • directly attacks the Court’s Amended Scheduling Order by seeking to impose a discovery cut-off that would have eliminated SCO’s discovery rights less than one month after IBM produced even a single version of the IBM software at issue in the case;

  • leverages its attack on the Court’s Amended Scheduling Order by trying to nullify the Magistrate Judge’s March 3, 2004 Order allowing SCO to show that it needs further versions of IBM’s software (which SCO could not begin to do until it received at least a single version of that software, and which it could not do at all under the discovery cut-off that IBM sought);

  • leverages its attack on the Court’s Amended Scheduling Order by trying to nullify the Magistrate Judge’s March 3 Order requiring IBM to produce rudimentary discovery sought for over one year (which IBM’s cut-off would allow it to never produce – as it still has not);

  • leverages its attacks even further by trying to cut off SCO’s discovery rights less than two months after IBM injected a wide range of additional issues into the case, encompassing all contributions to Linux by parties other than IBM; and

  • purports to support these attacks on Court Orders with selective quotations that omit material from the Court Orders and from publicly available documents on which the Orders are based.

See SCO’s Memorandum in Opposition to IBM’s Motion for Summary Judgment on IBM’s Tenth Counterclaim.

2. IBM’s Motion for Summary Judgment on Its Claim That SCO Infringed IBM’s Copyright. IBM also has moved for summary judgment on its Eighth Counterclaim, which seeks a declaration that SCO is liable for copying IBM code already contributed to Linux. That motion, among other things:

  • asserts that it is true as a matter of law that SCO is “licensing Linux,” see Part II.B.2, below;

  • does not inform the Court that SCO has never licensed anything but the right to use UNIX proprietary information – which SCO owns – whether found in Linux or elsewhere, see id.; and

  • does not inform the Court that SCO has licensed the right to use UNIX proprietary information in Linux in connection with the compromise of potential claims based on the literal or non-literal copying or other wrongful misappropriation of SCO’s UNIX proprietary information into Linux, see id.

IBM’s motion thus reduces to the indefensible claim that SCO may not license its own proprietary information, and may not settle or release valid claims in connection with that SCO-owned information, without incurring massive liability for somehow copying IBM code in Linux. IBM presents this theory as sufficiently serious and urgent that it warrants allowing IBM to accelerate adjudication while IBM also holds back discovery, returning the litigation to the pre-June 10 status.

3. IBM’s Motion for Summary Judgment on Its Claim That It Was Contractually Permitted to Copy and Distribute UNIX Material without Restriction. IBM also has moved for partial summary judgment on all of the contract claims in the case. IBM’s motion asks the Court to read the contracts as “giving” SCO far less protection for UNIX than SCO would have been able to claim without any contract, so that under IBM’s view SCO would have been better off with no contract at all. That motion, among other things:

  • claims that IBM’s and Sequent’s contracts with SCO’s predecessor AT&T allowed them to freely appropriate from UNIX so long as they did not literally copy UNIX code, see Part II.A.2, below;

  • claims that IBM only seeks protection for “homegrown” and “original” IBM work, but in fact asks the Court to interpret “homegrown” and “original” to include what even statutory and common law would call “copying” and “misappropriation,” see id.;

  • therefore claims that the licensor thus used its contracts to destroy the protections and claims it already had for its seminal innovation before entering into those agreements, see id.;

  • therefore claims that SCO’s predecessor AT&T gave IBM and Sequent the extraordinary gift of being able to exploit uncontrollably the seminal innovation embodied in UNIX – so long as IBM and Sequent made an easily evadable and thus empty commitment to AT&T, see id.;

  • asks the Court to disregard the plain language common to AT&T’s standard contracts, which prohibits the disclosure of “derivatives,” “modifications” and “methods or concepts” – terms specifically designed to support claims protecting proprietary information from misappropriation even when there is no literal copying of such information, see Part II.A.3, below;

  • asks the Court to disregard the plain language of the standard contracts, which required IBM and Sequent to treat each successive derivative or modification as if it were part of and subject to the very same protections as UNIX, thereby controlling the use and preventing the disclosure of the results of each covered step of the licensee’s UNIX-dependent program development, see id.;

  • asks the Court to disregard the plain language of the standard contracts, which do not contain any language limiting the licensor’s protections to the literal copying of code, see id.;

  • asks the Court to treat at least one key provision not merely as surplusage (which itself is improper), but as literally wrong – where simply inserting the word “not” would have accomplished what IBM claims was everyone’s intent, see id.;

  • thereby asks the Court to disregard these and other ways in which the license agreements did not reduce, but increased the licensor’s preexisting protections – as they had to given the increased risks the licensor was taking by granting the licensee permission to rely on the seminal UNIX innovation as the basis for its products, see id.;

  • asks the Court to rely on extrinsic evidence, even though black-letter law precludes summary judgment when the moving party must rely on such evidence, see Part II.A.4.a, below;

  • asks the Court to rely critically on the testimony of witnesses that in prior sworn testimony contradicted themselves on the key issues IBM places before the Court – testimony given long before IBM came to represent them, see Part II.A.4.b, below;

  • asks the Court to credit IBM’s current version of history as a matter of law while failing to disclose to the Court that IBM knows about its own witnesses’ directly inconsistent prior testimony, see id.;

  • asks the Court to credit its witnesses’ interpretation of the legal protections afforded to AT&T’s intellectual property when the AT&T attorney who was primarily responsible for supervising the drafting and enforcing of those protections – a witness who has provided IBM with a declaration that IBM has omitted from its summary judgment submission – has provided a sworn declaration that directly undermines, in numerous detailed ways, IBM’s reading of the contract, see id.;

  • mischaracterizes SCO’s contract theories by disregarding submissions SCO has made to the Magistrate Judge, setting forth theories IBM tells this Court SCO does not have, see Part II.A.1, below; and

  • supports its claim that SCO does not have such theories by pointing this Court to the fact that SCO has not yet produced certain types of evidence, while arguing to the Magistrate Judge that SCO should not be given access to that very same evidence because it is “wholly irrelevant,” see id.

It is on the basis of these extraordinary positions that IBM asks the Court to return the litigation to its pre-June 10 status and force SCO to waste its key depositions while IBM succeeds in holding back all of the discovery SCO has been seeking and which SCO is clearly entitled to receive.

IBM Continues to Refuse to Produce Discovery Relevant to Its Motions

By refusing to permit the Amended Scheduling Order’s discovery process to go forward, IBM has precluded SCO from obtaining discovery on numerous issues, including those bearing directly on IBM’s dispositive motions. In its July 9 Opposition Memorandum, for example, SCO has demonstrated that it has not had the opportunity to uncover a substantial amount of the evidence with which SCO would oppose IBM’s motion for summary judgment on the counterclaim in which IBM asks the Court to declare that no material ever contributed to Linux has violated any SCO copyright.

Similarly, IBM seeks to support its motion for summary judgment on SCO’s contract claims by alluding to SCO’s discovery responses and contending that SCO fails to offer any evidence that IBM’s contributions to Linux are “modifications or derivative works of any code in UNIX System V.” Yet the contract protects SCO from IBM disclosure and uncontrolled exploitation of any of its successive modifications or derivatives (all of which are defined as “resulting materials” and all of which are given the same protection from disclosure and uncontrolled exploitation as UNIX itself). IBM has nevertheless blocked the discovery SCO needs about this iterative development process to provide the specific responses whose absence IBM now seeks to exploit. In filings in both May and July, SCO has shown that only upon IBM’s production of specified discovery can SCO in any reasonable time frame – and with minimal efficiency – identify the evidence showing that IBM has made contributions to Linux through the very kinds of use and dependence on UNIX derivatives and modifications that the contracts protect from the very kind of disclosure and uncontrolled exploitation that IBM’s contributions to Linux involved. Yet when SCO tries to obtain the evidence to make that showing, IBM – having focused this Court on the absence of such evidence – tells the Magistrate Judge that the discovery should be blocked because such evidence is “wholly irrelevant.”

Over a year ago, moreover, SCO asked IBM to identify the programmers who have made contributions to AIX and Dynix and their specific contributions. In addition, the Magistrate Court ordered IBM to produce that information over five months ago, in its March Order. Yet IBM has failed to provide any of that information. IBM has also failed to produce early versions of AIX, which discovery is necessary to permit SCO to trace the progression of the kinds of dependence on UNIX System V material through AIX and Dynix that the contract envisioned and expressly prohibited licensees from exploiting, among its other protections. Without that information – which IBM does not dispute it has failed to provide – SCO could not depose the AIX and Dynix programmers in a remotely complete way. As one rudimentary example, SCO is plainly entitled to ask programmers questions about the code they have contributed to AIX and Dynix; without the early versions of AIX, SCO cannot sensibly depose any programmer about the contributions he made to AIX – because SCO will not even have the contributions in hand.

The longer IBM holds back the foregoing rudimentary, predicate information, the greater IBM will compromise SCO’s ability to use it effectively as a basis for further discovery and the development of its case. SCO has made this clear to IBM, and this is why even a deposition plan cannot be formed without disputes about such rudimentary discovery first being resolved. This is plainly true in the case, for example, of SCO’s ability effectively to take key contract depositions. With respect to IBM’s contracts motion, for example, only two of the witnesses whose testimony IBM presents have been cross-examined. At that time – when they were still immersed in the day-to-day issues and before their contact with IBM or its counsel – they testified to the reasons and justifications for the broad scope of the agreements, including the importance of the programming process by which the licensees would be developing products modified and derived from UNIX.

In preparing to take the depositions of the declarants on whom IBM relies, SCO is entitled first to take the depositions of the AIX and Dynix programmers, to show that the very risks inherent in the programming process on which IBM’s declarants focused before IBM came to represent them – and when they contradicted their present positions – were also concretely present in the programming processes at issue in this case. In other words, IBM improperly seeks to preclude SCO from cross-examining IBM’s summary judgment declarants with the very information that is the express basis of the contradictory sworn testimony of the only two declarants who were cross-examined regarding the scope of the license agreements. SCO’s capacity effectively to depose the foregoing contract witnesses depends on whether SCO can concretely show and remind these witnesses of the types of risks that concerned AT&T and underlie the license agreements. Moreover, increased risks to the licensor from the way the programming process works greatly inform why the increased contract protections were fashioned in the manner the plain contractual language reflects, in the manner IBM’s declarants previously explained, and in the manner IBM now denies. Because IBM relies on extrinsic evidence in supporting its position – not least on declarants who previously themselves relied on facts about the programming process when providing contradictory testimony – IBM’s refusal to allow discovery about that very same programming process while trying to force accelerated adjudication of contract interpretation issues is in an inexplicable and extraordinary position.

The multiple categories of documents and information that SCO has long sought not only are necessary predicates to the depositions, but would also bear directly on IBM’s motions. IBM continues to refuse to produce, for example, the AIX and Dynix revision information available on IBM’s Configuration Management Version Control (“CMVC”) System and Sequent’s Revision Control System (“RCS”). These are systems specifically designed to store all of the development history of AIX and Dynix, which would show step by step how the dependence of AIX and Dynix on UNIX was compounded over time in just the manner the contract protected from uncontrolled exploitation, by protecting against unrestricted use and disclosure of the results. That step-by-step process can only be seen through the program’s early history, and then only through examination of the development process itself – both of which IBM seeks to block. The same storage systems also contain programming notes, design documents and white papers. SCO has previously explained that those materials could readily contain admissions concerning the meaning of, and limitations imposed by, the license agreements; admissions regarding IBM’s liability for breaching those agreements; and admissions that the development of AIX and Dynix depended on UNIX System V. Under any theory of the agreements, the materials are relevant because they would permit SCO to test the validity of IBM’s claim that at some point AIX and Dynix ceased to be modifications or derivative works “based upon” UNIX System V and were no longer subject to the restrictions of the license agreements.

Even more basically, those documents would logically include programmers’ acknowledgements of the constraints they faced upon exposure to UNIX materials. SCO first requested all of this material on June 24, 2003. Because IBM did not produce even a single version of its AIX program until over a year into the case, SCO was not able to demonstrate its need for this additional discovery pursuant to the Magistrate Judge’s procedure until this summer. SCO will now not receive this discovery until sometime this fall, and will not be able to begin to analyze it and use until that time.

SCO respectfully submits that IBM should not be permitted to force the adjudication of its already premature and fact-intensive dispositive motions while also refusing to produce predicate discovery such as the foregoing. For all of these reasons, and as set forth in detail below, SCO asks the Court to defer the scheduling and adjudication of any dispositive motion until after the end of the Court’s fact-discovery period, which is now February 11, 2005.

ARGUMENT

I. UNDER ITS WELL-ESTABLISHED DISCRETION, THE COURT SHOULD DEFER BRIEFING ON IBM’S MOTIONS IN ORDER TO ENFORCE THE REVISED SCHEDULING ORDER AND TO PROMOTE THE FAIR AND EFFICIENT ADMINISTRATION OF THE CASE

It is black-letter law that a Court faced with a summary judgment motion may, even apart from its authority under Rule 56(f), “exercise its discretion under Rule 56” to “postpone consideration of the motion.” Charles A. Wright et al., Federal Practice and Procedure § 2728 (2004). The Court’s “discretion to postpone consideration of the motion for summary judgment” stems from a recognition that the “principles governing summary judgment procedure should be applied in a common sense manner to the realities of the litigation at hand.” Williams v. Howard Johnson’s, 323 F.2d 102, 106 (4th Cir. 1963); see also Young Enters., Inc. v. United States, 26 Cl. Ct. 858, 863 (Cl. Ct. 1992) (on summary judgment, the court “may also postpone a decision until it can be founded on a more complete factual record”); see, e.g., Adams v. R.R. Donnelley & Sons, Nos. 98 C 4025, 96 C 7717, 2001 WL 336830, at *7 (N.D. Ill. Apr. 6, 2001) (Exh. D) (deferring briefing and consideration of defendant’s summary judgment motion where plaintiffs reasonably had not taken discovery relevant to the motion). Indeed, the district court may even “deny summary judgment as a matter of discretion.” Toyoshima Corp. v. Gen. Footwear, 88 F.R.D. 559, 560 (S.D.N.Y. 1980).1

Here, the Court should exercise its well-established discretion to defer consideration of IBM’s summary judgment motions until after fact discovery is completed in this case. For the reasons detailed further herein, it is clear that even under a plenary review of the relevant facts, consideration of IBM’s motions at this juncture would impede the fair and efficient administration of this litigation by failing to apply the summary judgment procedure “in a common sense manner to the realities of the litigation at hand.” Williams, 323 F.2d at 106. This case, however, presents two unique additional circumstances that strongly counsel in favor of the Court’s exercise of its discretion to defer consideration of IBM’s motions.

First, in June, this Court granted SCO’s motion to extend the discovery period in this case, over IBM’s strident objection, until February 10. IBM’s coordinated filing of three fact-intensive summary judgment motions now threatens to undo that Order, in several respects:

    In filing the motions now, IBM proceeds just as if the Court had not entered the Amended Scheduling Order at all. IBM has produced no discovery since June 10. The result IBM sought to impose on SCO in unsuccessfully opposing the entry of the Amended Scheduling Order is the exact same result IBM seeks to impose through its recent motions – namely, to have the Court adjudicate core issues before IBM has permitted the relevant facts to see the light of day.

  • IBM filed its two most recent motions after having seen precisely the type of burdensome and time-consuming response to such motions SCO must make, given the fact-intensive nature of the motions and the limited discovery to date. SCO explained in great detail in opposition to IBM’s first motion for summary judgment, on IBM’s Tenth Counterclaim, that IBM’s failure to produce long-sought, predicate discovery made it impossible for SCO to respond to the motion in full on the merits. See SCO’s Mem. in Opposition to IBM’s Motion for Summary Judgment on Its Tenth Counterclaim (July 9, 2004). IBM’s motions thus threaten SCO’s ability to use the Amended Scheduling Order’s extended discovery period to take discovery (rather than divert resources to still more burdensome litigation over SCO’s indisputable right to do so).

  • IBM filed the motions during the pendency of SCO’s motions seeking to require IBM to produce rudimentary predicate discovery that pertains to the basic issues in the case, including (of course) IBM’s motions. In contrast even to its first summary judgment motion – which IBM in any event filed having failed to produce the rudimentary discovery at issue – IBM filed its most recent motions after SCO moved again to compel IBM to produce that discovery, and thus seeks to preempt SCO’s efforts to obtain that discovery. See SCO’s Mem. in Support of Its Renewed Motion to Compel (July 6, 2004) & Reply Mem. in Support of Renewed Motion to Compel (Aug. 26, 2004).

  • IBM timed the motions not only to take advantage of its refusal to produce, and to preempt SCO’s efforts to obtain, that discovery, but also to coincide with the hearing date on SCO’s pending discovery motions. Having argued for and received from SCO a mid-September hearing date on SCO’s discovery motions, IBM thereafter took care to impose mid-September return dates on the motions, going so far as to serve SCO’s counsel at his home on a Friday at 9 p.m. See Certificate of Service dated Aug. 13, 2004 (Exh. 2).2

  • IBM has now coupled the foregoing conduct with its proposal that SCO would be entitled to “reasonable” extensions of time to respond to the motions only if SCO agrees not to invoke Rule 56(f). See Letter from T. Shaughnessy to B. Hatch dated Aug. 27, 2004 (Exh. 1). In that additional respect, IBM seeks to leverage its motions to nullify the right that any litigant has during fact discovery – namely, to demonstrate to the Court what further discovery it needs and expects to find to support its claims and to defend against its adversary’s claims – and thereby to further undermine the Court’s extended period for fact discovery.

Second, while an early dispositive motion may in certain cases facilitate the orderly preparation of the case by eliminating or focusing issues, in light of the timing of IBM’s motions, there are no potential benefits to be gained from allowing IBM’s fact-intensive motions to be accelerated no less than six months ahead of the close of the fact-discovery cut-off. The accelerated schedule IBM seeks to impose could not streamline or avoid discovery burdens or create any other administrative efficiencies in this case. This is plain wholly apart from the question of whether IBM should be able to force SCO to go forward with key depositions now or otherwise to litigate motions now without yet having secured the benefit of further discovery.

There is no reason to expect that on any even minimally reasonable schedule IBM’s motions could be decided before the end of the year (if then). Prior to that time, SCO’s need for discovery could not be held in suspension. To the contrary, SCO would need, and would be entitled, to secure discovery, for example, not only to rebut IBM’s extrinsic evidence with respect to the interpretation of the contracts, but also to establish IBM’s violations of the contracts. If IBM’s contract motion were at that time resolved in SCO’s favor, SCO could not begin such discovery only then – that course would leave SCO only weeks to accomplish what the Amended Scheduling Order contemplated would take eight months. Instead, to protect SCO’s discovery rights, SCO would need to proceed with all of this discovery during the pendency of the motions, as IBM would plan to do with its respective discovery. (In late August, for example, IBM noticed for September, October, and November over twenty depositions.)

In addition, the discovery the parties are entitled to continue to take through the close of fact discovery would itself bear on the merits of IBM’s motions. At the very least, SCO would be compelled to summarize and present that evidence to the Court at the time of the hearing on IBM’s motions (and, if appropriate, thereafter). That evidence would be relevant whether or not the parties have “fully briefed” the motions well before the hearing, and whether or not SCO has formally moved under Rule 56(f) in response to IBM’s motions.3

By setting the schedule for dispositive motions – especially fact-intensive motions such as those at issue here – after the close of fact-discovery, the Amended Scheduling Order avoids such series of supplemental submissions. IBM’s approach not only does not avoid them, but essentially guarantees such inefficiencies: By forcing fact-intensive dispositive motions to be adjudicated no less than six months before the end of fact discovery, IBM presents the Court with a constantly moving target; IBM then aggravates the problem it created by holding back discovery – further increasing the likelihood that SCO will receive it late in the day and at a point when it will need to supplement its briefs on IBM’s needlessly accelerated dispositive motions.

Accordingly, in at least the two foregoing respects alone, a common sense regard for the realities of this litigation – as well as considerations of basic fairness and orderly procedure –militate in favor of deferring consideration of IBM’s summary judgment motions until after the February 11 fact-discovery cut-off. IBM’s foregoing conduct might not (at least not plainly) undercut the Amended Scheduling Order or impede the fair and efficient administration of this case if IBM were at all likely to prevail on its motions, if IBM had properly withheld the discovery at issue, or if the discovery SCO has long sought and continues to seek were collateral to the motions. But the opposite is true here.

SCO shows in Part II, below, that even cursory scrutiny of IBM’s dispositive motions reveals that they are overtly fact-intensive, premature, and meritless. SCO further shows in Part III, below, that the discovery that is currently at issue before the Magistrate Court not only is necessary predicate discovery to further, targeted discovery relevant to the motions, but also is itself directly relevant to the motions – and that IBM does not even dispute its failure to produce crucial parts of that discovery. Thus, by timing its motions as it has, IBM would impede the Court’s evaluation of the (supposed) merits of IBM’s motions (see Part II), and undercut the Court’s administration of the case (see Part III). SCO therefore submits, and further demonstrates in Parts II and III, below, that the Court should exercise its well-established discretion to defer its consideration of IBM’s summary judgment motions until after fact discovery in this case.

II. EVEN BRIEF SCRUTINY OF IBM’S SUMMARY JUDGMENT MOTIONS REVEALS THAT THEY ARE PREMATURE AND MERITLESS BECAUSE THEY REST ON DISPUTED FACT-INTENSIVE ARGUMENTS

Even a brief review of IBM’s summary judgment motions – which overtly rely on numerous fact-intensive arguments – reveals that those motions are both premature and meritless. Because SCO has already submitted full briefing demonstrating the serious factual and legal deficiencies in IBM’s summary judgment motion on its Tenth Counterclaim, this memorandum focuses on IBM’s two most recent motions, which concern SCO’s contract claims and IBM’s Eighth Counterclaim. SCO focuses particularly on IBM’s contract motion because its fact-intensive approach puts squarely at issue facts that are the subject of discovery IBM has improperly refused to produce for over a year.4

A. IBM’s Fact-Intensive Summary Judgment Motion on SCO’s
Contract Claims Is Demonstrably Meritless and Premature

1. IBM’s Motion Depends Upon Its Mischaracterization of
SCO’s Contract Claims

As an initial matter, IBM’s contract motion rests on a significant mischaracterization of SCO’s contract claims. IBM inaccurately asserts that those claims “rest entirely on the proposition that ‘[t]he AIX work as a whole and the Dynix/ptx work as a whole are modifications of, or are derived from [UNIX] System V.’” IBM Contract Mem. ¶ 62. That is false. SCO does maintain that AIX and Dynix are subject to the restrictions of the licensing agreements because they are derivatives of UNIX, and consequently that IBM breached the license agreements by contributing to Linux any portion of those contractually-protected derivatives. As discussed below, this position is well-supported by both a plain reading of the license agreements and the prior sworn testimony of IBM’s own witnesses. See Parts II.A.3-4, below. Moreover, IBM and Sequent have repeatedly referred to each of AIX and Dynix, respectively, as derivatives of UNIX. See, e.g., Computerworld: IBM’s Mills sets sights on middleware, Linux, October 24, 2003 (Exh. 3) (“We took the Unix System V kernel and we made modifications”); Email from Bill Sandve to Kim Tran, January 22, 2002 at 2 (Exh. 4) (“AIX was derived from System V.”); Agreement for Licensing of AIX Source Code and Related Products between Argus Systems Group, Inc. and IBM ¶ 8.4 (Exh. 5) (“AIX is derived form software under license from SCO.”); International Business Machines Corp. Royalty Statement, June 30, 1987 (Exh. 6) (stating that AIX is “derived from System V”); IBM/Supplier Technical Services Agreement at 1 (Exh. 7) (“‘AIX Operating System’ or ‘AIX’ shall mean the UNIX operating system that operates on the Power, Power PC, Power 2, Power 3, and Power 4 architectures or derivatives or follow-on architectures irrespective of the names of such architecture.” (emphasis added)); Rodgers Dep. 138 (Exh. 8) (“Dynix/ptx is almost certainly a derivative work of Unix System V.”).

Nevertheless, contrary to IBM’s suggestion, SCO’s contract claims do not, by any stretch, “rest entirely” on the above-described theory of IBM’s contract liability. Rather, SCO advances a distinct, and additional, basis for IBM’s liability under the license agreements, which focuses specifically on the particular code contributions that IBM has made to Linux. SCO seeks to demonstrate in this case that IBM violated the license agreements by making particular contributions to Linux of code sections that are themselves UNIX modifications or derivatives. See, e.g., SCO’s Reply Mem. Re Discovery (July 12, 2004) (“Reply Mem. re Disc.”), at 11-14.

SCO has repeatedly described these different theories to IBM in numerous memoranda and discovery requests – including, recently, SCO’s July 12 Reply Mem. Re Discovery5 – but IBM continues to ignore SCO’s second theory of liability. IBM’s refusal to acknowledge this theory is remarkable, and convenient, because, as detailed below, IBM has consistently blocked the very discovery that IBM needs to pursue this second theory of contract liability. See Part III.B, below. As SCO has explained to IBM, SCO’s second theory requires a close tracing of the development of IBM’s code contributions from UNIX System V code through AIX and Dynix into Linux.6 As detailed in Part III, below, however, IBM has now been actively resisting for more than a year. 7

Indeed, in resisting the discovery that would permit SCO to show the UNIX origins of the AIX and Dynix code that IBM has dumped into Linux, IBM has told Magistrate Judge Wells that such discovery is irrelevant to the issues in this case. See IBM’s Opp. to SCO’s Renewed Mot. to Compel, at 9. Now, however, IBM seeks summary judgment from this Court on IBM’s contract claims, and relies on SCO’s failure to produce the very evidence that such discovery would provide in order to support its inaccurate assertion that SCO’s contract claims must “instead rest entirely” on its theory that AIX and Dynix are, in their entireties, modifications or derivatives of UNIX System V. IBM Contract Mem. ¶¶ 57-62. In this circular fashion, IBM’s mischaracterization of SCO’s contract claims thus seeks to exploit IBM’s failure to produce critical discovery and to expedite resolution of the key issues in this case before IBM is required to produce such discovery.

2. IBM’s Claim That the UNIX License Agreements Actually Reduced
AT&T’s Legal Rights By Giving IBM the Unfettered
Rights to Own and Control Such Copied Work Is Absurd.

In addition to mischaracterizing SCO’s contract theory, however, IBM attempts to advance (and prevail as a matter of law on) a contract theory of its own – a reading of the license agreements under which IBM and Sequent were free to do anything with any modifications or derivatives of the licensed UNIX product so long as those modifications or derivatives did not literally copy UNIX code. For the reasons discussed below, that contract interpretation defies economic logic, directly contradicts the plain language of the license agreements themselves, and finds support only in declarations that are either untested or have been totally undermined by flatly inconsistent prior testimony and contemporaneous writings of IBM’s witnesses.

In attempting to justify its proposed contract interpretation, IBM also mischaracterizes its own position. IBM insists that it seeks only to preserve ownership and control of IBM’s purely original work, casting SCO as contending that SCO should own and control what can “indisputably” be shown to be IBM’s so-called “homegrown” work. IBM Contract Mem. at 2. Divorced from its rhetoric, however, IBM’s argument reduces to an incredible claim that under the very license agreements whose purpose was to protect the UNIX intellectual property, IBM obtained the unfettered rights to own and to control work that IBM copied or derived from UNIX.

In other words, IBM contends that the agreements protected the licensor against only the literal copying of its code: IBM expressly defines “homegrown” code as “source code that is written by IBM and does not include UNIX System V code.” IBM Contract Mem. at 2. What IBM calls “homegrown” code turns out not be “homegrown” at all. Instead, that material includes – at a minimum – every non-literal copy IBM ever made of any form of UNIX material.

IBM’s argument is baseless. SCO shows in Parts II.A.2-3, below, that the agreements clearly and expressly (1) protect against the misappropriation and unauthorized disclosure of “modifications” and “derivative works” – without any showing of literal copying; (2) protect against misappropriation of UNIX “methods or concepts” – without any showing of literal copying; and (3) do not once mention any limitation on the licensor’s protection to protection against only literal copying.

Moreover, IBM’s claimed right to make and appropriate for itself copies of SCO’s code, so long as the copies are not literal copies, is one that IBM would not even have under the copyright laws. Basic copyright law has long recognized that copying can occur through the making of “derivatives” without any literal copying at all.8 Moreover, the common law not only protects “methods or concepts,” but also extends farther, beyond trade secrets, and far beyond literal copying. IBM’s claim thus reduces to the untenable proposition that under the terms of the license agreements, IBM can do what copyright and common law would forbid: make non-literal copies of another’s work and innovation, and thereby misappropriate that innovation for itself.

According to IBM’s argument, the parties to the license agreements struck an absurd (and, to use IBM’s terminology, “commercially unreasonable”) deal. IBM sought – and, by virtue of the license agreements, received – the benefit of using AT&T’s broadly-used (and customer-demanded) innovation UNIX to build IBM’s own self-described “flavor” and “modification” of AT&T’s product, so that IBM did not have to incur the expense and risk of developing its product from scratch. In order to confer this substantial benefit on IBM, AT&T had to allow IBM to immerse its engineers in AT&T’s proprietary and confidential material, which created heightened dangers of misappropriation, whether literal or non-literal, and which required AT&T to fashion suitably heightened contractual protections for its intellectual property. AT&T thus sought to protect itself against those dangers by obtaining, through contract, protections beyond that which were already afforded to it by copyright and common law. Indeed, the actual concerns underlying, and intent of, AT&T’s UNIX license agreements were aptly described by David Frasure – one of the declarants on whom IBM heavily relies in its motion – in his prior sworn testimony:

“if you’ve got a group of people over here developing a set of source code and they have never seen the Unix source code, they’ve never been too exposed to it and the[y] develop a product completely on their own, then that’s one thing. But if they’re developing a product with the benefit of Unix or perhaps they have used it for – for a number of years, ten years, and then they think they’re going to go off and develop something on their own that’s an operating system that may look like Unix, we had – we expressed our concern that – that we had an interest in that product.” Frasure Dep. (12/8/92) at 20 (Exh. 9) (emphasis added).9

Yet IBM now contends that when AT&T gave IBM this benefit and exposed itself to these heightened risks, AT&T did not receive proportionally greater protection. To the contrary, IBM claims that AT&T received far less protection for its innovation than if IBM had not received the benefit – if IBM had been forced to innovate for itself. IBM claims that was the deal, even though it makes no economic sense; even though (as explained further in the next section) the key provisions of the AT&T contracts include clear and unambiguous language that had and has no recognized function except to protect against non-literal copying, and no language that restricts protection to literal copying; and even though (as explained in Part II.A.4, below) substantial extrinsic evidence developed thus far compels the opposite conclusion. SCO thus submits that apart from the plain contractual language and the extrinsic evidence that undermines IBM’s position, IBM’s remarkable contractual interpretation warrants at least full factual exposition of the circumstances under which the parties contracted and each party’s intent in contracting.

3. The Plain and Unambiguous Language of the License
Agreements Directly Contradicts IBM’s Interpretation.

In an attempt to support its economically irrational reading of the license agreements, IBM purports to rely on the plain language of AT&T’s standard license agreement and a side letter agreement that AT&T entered into with IBM (the “IBM Side Letter”) – but not with Sequent. There is no merit to IBM’s argument that it is entitled to summary judgment on the ground that these documents unambiguously resolve, in its favor, the issues on both contracts.10

Section 2.01 of both license agreements expressly grants to each licensee “a personal, nontransferable and nonexclusive right to use in the United States each SOFTWARE PRODUCT identified in the one or more Supplements hereto solely for LICENSEE’S own internal business purposes and solely on or in conjunction with DESIGNATED CPUs for such SOFTWARE PRODUCT.” It is undisputed that the “SOFTWARE PRODUCT” includes UNIX System V.11 Moreover, Section 2.01 further provides: “Such right to use includes the right to modify such SOFTWARE PRODUCT and to prepare derivative works based on such SOFTWARE PRODUCT, provided the resulting materials are treated hereunder as part of the original SOFTWARE PRODUCT.” (Emphasis added). Thus, in direct contrast to IBM’s claim that the agreements protect against only a licensee’s literal copying of IBM source code, Section 2.01 unambiguously protects any modifications or derivatives of UNIX System V.

By requiring that “resulting materials” be treated “as part of” UNIX for purposes of the contract, Section 2.01 expressly and unambiguously precludes IBM’s claim that the agreements protect against only a licensee’s literal copying of UNIX source code. Section 2.01 protects the “materials” that “result[]” from (1) the licensee’s exercise of its “right to modify” the original “SOFTWARE PRODUCT” (which includes the UNIX System V source code) and (2) the licensee’s right “to prepare derivative works based on such SOFTWARE PRODUCT.” IBM’s proposed construction of the license agreements violates each of the well-settled principles of contract interpretation requiring (1) that no contractual provisions be rendered superfluous; and (2) that contractual provisions are not read to internally conflict with each other. See Merrill Lynch v. Adler, 651 N.Y.S.2d 38, 39 (App. Div. 1996) (“an agreement should be read to give effect to all of its provisions and to render them consistent with each other”) (emphasis added); Ruttenberg v. Davidge Data Sys. Corp., 626 N.Y.S.2d 174, 178 (App. Div. 1995) (citing the “rule of construction that a contract shall be read so as to give effect to each and every term”); Robshaw v. Health Mgmt., Inc., 470 N.Y.S.2d 226, 227 (App. Div. 1983) (employing “general rule that a contract should be interpreted to avoid inconsistencies and to give meaning to all of the terms” (citing 22 N.Y. Jur. 2d, Contracts §§ 221, 222)); Garza v. Marine Transport Lines, Inc., 861 F.2d 23, 27 (2d. Cir. 1988) (suggested interpretation of a contract that would “render at least one clause superfluous or meaningless” should be “avoided if possible”).12

If IBM’s interpretation were correct, then the requirement that “resulting materials” be “treated as part of the original SOFTWARE PRODUCT” would be rendered superfluous, because UNIX source code is already clearly and indisputably contained within the original SOFTWARE PRODUCT. In other words, there would simply be no reason for the contract to treat source code contained in “resulting materials” “as part of the original SOFTWARE PRODUCT” if such source code is already automatically included in the original SOFTWARE PRODUCT.

Furthermore, IBM’s “source code only” argument is patently wrong for the additional reason that it is incompatible with the Section 2.01 language requiring derivatives or modifications to be treated “as part of” the original SOFTWARE PRODUCT. By definition, treating “resulting materials” – “modifications” and “derivatives” – “as part of the original SOFTWARE PRODUCT” must mean adding something to the “original SOFTWARE PRODUCT” that was not already there. In other words, since source code is already contained in the “original SOFTWARE PRODUCT,” then IBM’s reading of Section 2.01 (i.e., that it covers only UNIX source code) would provide nothing to add (i.e., nothing to treat “as part of”).

Even beyond the plain meaning of Section 2.01, Section 7.06(a) of the operative IBM and Sequent license agreements each include a specific provision requiring the licensee to hold the “SOFTWARE PRODUCTS subject to this Agreement in confidence for AT&T.” 13 The Sequent agreement further specifies that the licensee “shall not make any disclosure of any or all of such SOFTWARE PRODUCTS (including methods or concepts utilized therein) to anyone, except to employees of LICENSEE to whom such disclosure is necessary to the use for which rights are granted hereunder.” Id. (emphasis added).

Thus, Section 7.06(a) of the license agreements not only expressly extended the requirement of confidentiality to all aspects of the “SOFTWARE PRODUCTS” (which, by virtue of Section 2.01, were treated identically to any modifications or derivatives based on such SOFTWARE PRODUCTS), but also specified (in the case of the Sequent agreement) that protection of the SOFTWARE PRODUCTS included protection of the “methods or concepts utilized therein.” Again, a plain reading of these provisions is directly at odds with the tortured construction advanced in IBM’s dispositive motion.

IBM tries to avoid the plain language of Sections 2.01 and 7.06 by claiming that a side letter that it entered into with IBM (but not Sequent) somehow nullified both of these cornerstone contractual provisions (both for itself and for Sequent and by extension all of the other thousands of UNIX licensees). Moreover, IBM contends that its side letter accomplished this drastic change merely by “clarifying” the agreements. IBM Contract Mem. at 54. IBM’s misuse of its side letter is indefensible, for several reasons.

First, in suggesting that the IBM Side Letter limited the protections of Section 2.01 to source code only, IBM ignores entirely that the plain language of the provision on which it relies concerned the ownership of derivatives and modifications, and not the contractual protections that were afforded the licensor concerning their use and disclosure: “Regarding Section 2.01, we agree that modifications and derivative works prepared by or for you are owned by you. However, ownership of any portion or portions of SOFTWARE PRODUCTS included in any such modification or derivative work remains with us.” (Emphasis added). Plainly, this language did not purport to compromise – and did not in fact compromise – AT&T’s right to control the use and disclosure, among other things, of such modifications or derivative works, as clearly set forth in the license agreements – particularly, Sections 2.01 and 7.06(a). As the licensor, AT&T acknowledged in the IBM Side Letter that it would not claim ownership of modifications or derivative works that had been prepared by a licensee, but it never agreed to give away its right to protect its intellectual property by ensuring that licensees would not use or disclose works that were copied (even non-literally) from its innovations. 14

In light of the fact that the IBM Side Letter left entirely in place the existing language in Section 2.01, IBM’s suggestion that the “Regarding 2.01” clause of the IBM Side Letter somehow “clarified” out of existence most of the contractual protections afforded by the UNIX license agreements is particularly incomprehensible. As discussed above, Section 2.01 plainly covers far more than mere literal source code, and, for the reasons previously discussed, IBM’s “source code only” reading of Section 2.01 renders the express contractual protection requiring “resulting materials” to be “treated as part of the original SOFTWARE PRODUCT” both superfluous and illogical.

Moreover, if the IBM Side Letter were intended to cut back the Section 2.01 protections to mere literal source code, as IBM contends, that would have been exceedingly easy to accomplish as a drafting matter. Instead of leaving the “resulting materials” clause of Section 2.01 entirely in place, the IBM Side Letter could have simply added the word “not” before “treated as part of the original SOFTWARE PRODUCT.” With that simple change, IBM could have effected the very change that it now reads into the side letter – economically, easily, and clearly. Without such a change, however, the plain language of the license agreements precludes the retroactive change that IBM is attempting to make.

IBM similarly relies on a misinterpretation of its side letter when it suggests that the amendment to the language of Section 7.06(a) somehow “clarified” all of the licensor’s contractual protections out of existence.15 As with IBM’s other side-letter argument, however, this claim contains the fatal flaw that the IBM Side Letter did not modify – or purport to modify – any of the restrictions contained in Section 2.01. In addition, the IBM Side Letter specifically reiterated that IBM was required to accord confidential treatment to all SOFTWARE PRODUCTS – and, therefore, pursuant to Section 2.01, all modifications and derivatives that were “based on” such SOFTWARE PRODUCTS. Accordingly, although the IBM Side Letter acknowledged that IBM could engage in “developing and marketing products or services employing ideas, concepts, know-how or techniques relating to data processing embodied in SOFTWARE PRODUCTS,” there is no merit to IBM’s suggestion that the IBM Side Letter somehow unambiguously removes, even for just IBM only, the license agreements’ use and disclosure restrictions on far more than just literally copied code.

Finally, and wholly apart from the absence of textual support for its sweeping (re)construction of the IBM Side Letter, IBM’s argument concerning the side letter would not entitle it to summary judgment for the independently-sufficient reason that the side letter did not cover Sequent. In fact, although the Sequent license agreement was entered into just a couple of months after the IBM agreement and side letter, none of the language on which IBM (incorrectly) relies from its side letter was included (by side letter or otherwise) in the Sequent agreement. Nor is there any support in the contractual language for IBM’s suggestion that Sequent and other licensees somehow received the benefit of such “clarifications” – and in the case of Sequent, even previously-executed “clarifications” – even though no such language had been included in their written contracts. IBM Contract Mem. at 53-54. To the contrary, each of the UNIX license agreements (including the Sequent agreement) contained clear and unambiguous integration language that specifically ruled out after-the-fact “me too” arguments such as those advanced here by IBM (on Sequent’s behalf):

“This Agreement and its Supplements set forth the entire agreement and understanding between the parties as to the subject matter hereof and merge all prior discussions between them, and neither of the parties shall be bound by any conditions, definitions, warranties, understandings or representations with respect to such subject matter other than as expressly provided herein or as duly set forth on or subsequent to the date of acceptance hereof in writing and signed by a proper and duly authorized representative of the party to be bound thereby. No provision appearing on any form originated by LICENSEE shall be applicable unless such provision is expressly accepted in writing by an authorized representative of AT&T.” Exh. 13, ¶ 4; Exh. 14, ¶ 4 (emphasis added).

Notably, IBM ignores entirely this integration clause in its strained attempt to transfer its misreading of the IBM Side Letter over to the Sequent license agreement.16

4. IBM’s Reliance on Extrinsic Evidence Lacks Any Merit.

Faced with the plain language of the license agreements, IBM purports to support its contract summary judgment motion with extrinsic evidence in the form of (largely untested) witness declarations. That evidence, however, is both legally and factually incapable of supporting IBM’s motion.

In fact, the extrinsic evidence on which IBM relies is directly contradicted not only by the declaration submitted herewith from Martin Pfeffer, AT&T’s principal attorney responsible for the intellectual property protections provided by the UNIX software licenses, but also by the prior statements (including sworn testimony) of the only two IBM declarants who have been subjected to cross-examination (in a prior litigation). Even though none of this extrinsic evidence – which eviscerates IBM’s argument – is even mentioned in IBM’s brief, there can be no doubt that IBM is aware of it: IBM has obtained (but not used in its summary judgment motion) a declaration from Mr. Pfeffer, and IBM produced in discovery the transcripts of its own witnesses’ prior inconsistent statements.

Given the lack of textual support in the contracts for IBM’s interpretation, as well as the genuine issues of fact that already exist at this early stage of deposition discovery concerning the contract issues, IBM’s suggestion that those issues can be resolved in its favor as a matter of law – without any further discovery – is frivolous.

a. IBM’s reliance on extrinsic evidence precludes
summary judgment as a matter of law.

The weight of well-reasoned authority – including cases applying New York contract law – hold that “in a contract dispute, summary judgment may be granted only where the language of the contract is unambiguous.” Bouzo v. Citibank, 96 F.3d 51, 58 (2d Cir. 1996) (emphasis added). That is in part because the Court must construe ambiguous contractual terms in favor of the non-moving party; so if a contract is ambiguous, genuine issues of fact must exist. See id. Put another way:

If the court must resort to extrinsic evidence to ascertain the correct and intended meaning of a term, material questions of fact necessarily exist. If the language is susceptible to different reasonable interpretations, and where there is relevant extrinsic evidence of the parties’ actual intent, then the contract’s meaning becomes an issue of fact precluding summary judgment.”

Alexander & Alexander Servs., Inc. v. These Certain Underwriters at Lloyd’s, London, 136 F.3d 82, 86 (2d Cir. 1998) (emphasis added). 17 In addition to the purportedly “relevant extrinsic evidence” on which IBM so heavily relies, there is already available – even at this relatively early stage of SCO’s contract-related discovery substantial extrinsic evidence directly contradicting IBM’s interpretation of the agreement. See Part II.A.4, below.

The limited case law cited by IBM for its contention that “summary judgment is appropriate” here despite IBM’s heavy reliance on extrinsic evidence does not dictate a contrary result. See IBM Contract Mem. at 56, 66. For example, IBM selectively quotes Moncrief v. Williston Basin Interstate Pipeline Co., 174 F.3d 1150 (10th Cir. 1999), for the proposition that summary judgment may be appropriate “where [the evidence] so clearly weighs in one direction that there is no genuine issue of material fact left.” IBM Contract Mem. at 56 (citing Moncrief at 1173). But IBM ignores the unusual procedural posture of the Moncrief case: A bench trial had already been conducted on the issue of damages, during which a complete record was established on the issue of liability as well. And IBM omits to mention that it was for that specific reason – and that reason alone – that the appellate court declined to remand the contract interpretation issues to the district court, but instead ruled on those issues itself as a matter of summary judgment. See id. at 1174 (“Because of the unusual procedural posture of this issue – an issue decided on summary judgment, yet about which the parties introduced evidence and testimony at trial – we have before us all of the arguments and evidence relevant.” (emphasis added)). Indeed, had that not been the case, the Moncrief court itself recognized that in “most such cases” where the court finds contractual ambiguity, it “must remand . . . for findings regarding the interpretation of the ambiguous contract.” Id. at 1173 (emphasis added). IBM even conspicuously omits from its quotation of the Moncrief opinion, the first half of the very sentence it quotes, in which the court expressly acknowledged that it was breaking with the standard required practice (of remanding the case to the trier of fact to resolve the contract interpretation issues) because “all the extrinsic evidence is in, and where that evidence so clearly weighs in one direction that there is no genuine issue of material fact left for the district court to decide.” Id. at 1173 (emphasis added). Here, as IBM appears to recognize in selectively editing the Moncrief court’s opinion, there can be no argument that “all of the extrinsic evidence is in”; to the contrary, substantial fact discovery remains to be taken on the contract interpretation issues.18

Moreover, IBM’s motion is legally unsustainable for a separate, and independently sufficient, reason: The motion relies substantially, and improperly, on the untested declarations of witnesses SCO has not yet deposed. The very New York courts on whose decisions IBM otherwise relies make clear that summary judgment cannot be granted in these circumstances. See G-I Holdings v. Baron & Budd, 213 F.R.D. 146, 149 (S.D.N.Y. 2003) (denying summary judgment on the ground that “untested affidavits are not acceptable”); Messina v. Mazzeo, 854 F. Supp. 116, 141-42 (E.D.N.Y. 1994) (holding that where non-moving party had not yet deposed important affiants, “it cannot be said with certainty that a deposition” would not “uncover material issues of disputed facts,” leading the court to rule that “summary judgment is premature” (emphasis in original)). A summary judgment motion cannot properly be founded on undeposed, untested affiants because, in considering such a motion, the Court must construe all evidence “in the light most favorable to the non-moving party.” Konikoff v. Prudential Ins. Co., 234 F.3d 92, 97 (2d. Cir. 2000).19 Moreover, the above rule applies with particular force here, where the few IBM declarants whose testimony has been tested through cross-examination gave sworn testimony that is directly contrary to the declarations on which IBM relies for its motion. See Part II.A.4, below. SCO has not yet deposed IBM’s untested declarants because, as explained at length above, IBM has withheld the critical predicate discovery that SCO needs to take effective depositions of the witnesses. See also Part III, below. While SCO pursues that discovery through litigation – including a litigation to enforce the Magistrate Court’s prior Order with which IBM has not complied – IBM cannot properly use premature summary judgment motions to force SCO to take depositions without necessary predicate discovery.

b. Even at this early stage of SCO’s contract-related discovery, summary
judgment is precluded by the numerous disputed issues of fact that
exist concerning the extrinsic evidence on which IBM relies

Only two of the declarants on whom IBM relies (Otis Wilson and David Frasure) have been subjected to any cross-examination. Each of those witnesses made prior statements and gave sworn testimony that directly contradict the key statements they have made in their declarations for IBM. Moreover, Messrs. Wilson and Frasure made their prior statements more than a dozen years closer to the events at issue, when the witnesses were immersed in those issues on a regular basis, and many years before IBM began representing them or paying for their representation in this case.

The prior inconsistent testimony and written statements of Mr. Wilson and Mr. Frasure not only directly undermine the credibility of the declarations that they have recently provided to IBM, but also provide clear support for SCO’s interpretation of the plain and unambiguous meaning of the license agreements. 20 Moreover, SCO has submitted herewith the declaration of Martin Pfeffer, the AT&T attorney who had principal responsibility for overseeing the drafting and enforcement of AT&T’s intellectual property protections in its UNIX license agreements during the precise timeframe of the IBM and Sequent agreements.

Thus, to the extent that it is even relevant or admissible on the interpretation of the AT&T license agreements, the extrinsic evidence available to date both precludes summary judgment for IBM and highlights the need for further discovery so that SCO can test the declarations of IBM’s other witnesses.

The Prior Inconsistent Statements and Testimony of Otis Wilson and David Frasure

The Wilson and Frasure declarations on which IBM relies were signed within the past six months. Mr. Wilson was a former AT&T and USL employee; Mr. Frasure was his underling and is a recent felony insurance fraud convict. Frasure Dep. (12/8/92) at 116-19 (Exh. 9). Mr. Wilson is represented by IBM’s corporate counsel in this case, Wilson Dep. (12/10/92) at 7 (Exh. 15); and Mr. Frasure, whose legal bills are being paid by IBM, Frasure Dep. (12/8/92) at 114 (Exh. 9), is represented by an attorney closely associated with IBM. 21

IBM relies on those witness’ declarations to advance the following four claims critical to its contract motion: (1) IBM’s general claim the license agreements protected AT&T against only literal copying of actual UNIX System V source code; (2) IBM’s specific claim that the agreements did not protect anything more than source code in their coverage of modifications and derivatives of the original licensed software product; (3) IBM’s specific claim that the agreements did not protect methods and concepts embodied in the original product; and (4) IBM’s claim, based principally on its side letter, that the license agreements made no distinction between ownership rights, on the one hand, and contractual restrictions on licensees’ use, copying, distribution, and disclosure privileges, on the other. On each of these points, however, the witness’ prior inconsistent statements directly and unmistakably undermine IBM’s argument.

First, IBM relies on the recent declarations from Mr. Wilson and Mr. Frasure for its principal, and audacious, argument that the AT&T’s license agreements protected against only the literal copying of UNIX System V source code. See Wilson Decl. (April 2004) ¶ 12 (Exh. 16) (opining that UNIX license agreements “do not, and were not intended to, restrict our licensees’ right to use, export, disclose or transfer their own products and source code, as long as they did not use, export, disclose or transfer AT&T’s UNIX System V source code along with it”); Frasure Decl. (March 2004) (Exh. 18) ¶ 28 (claiming that licensees were free to use and disclose their products “so long as they did not disclose any UNIX System V code”).

But the witness’ prior statements, including their sworn testimony, are expressly and unequivocally to the contrary. These contradictions alone create issues of fact precluding summary judgment in IBM’s favor. In 1992, Mr. Wilson and Mr. Frasure testified in a lawsuit between UNIX Systems Laboratories (“USL”), assignee of AT&T’s rights to UNIX, and one of its licensees, Berkeley Software Design (“BSD”). In that case, Mr. Wilson testified that AT&T’s license agreements protected far more than just “UNIX System V code” – and that he had expressly communicated that view to AT&T’s licensee. Wilson Dep. (12/10/92) at 128 (Exh. 15). Explaining the contractual significance of the licensee’s “exposure” to AT&T’s original UNIX product, Mr. Wilson further testified:

“Q:If the University of California were to develop a software product that they contended was their property to do with whatever they felt was appropriate, regardless of AT&T, and the university, as you know, has had exposure to the UNIX operating system, has worked with it for many years, is it your understanding that that software that the University of California would develop would be subject to any of the restrictions in the AT&T licensing agreement?
A: Absolutely. It would be.
Q: And why is that?
A: As you characterized it, you said if they had developed some software with exposure to the licensed software would it be subject to the AT&T agreement. I’m saying absolutely that would be the case. That’s why they always used both. They were careful if they had any exposure to the licensed software, it was a given that you had to have a license from AT&T.” Id. at 127-128 (emphasis added).

Furthermore, in a letter that Mr. Wilson wrote to IBM on July 27, 1987, he clearly stated that AT&T intended for its license agreements to protect from disclosure even products that were based on derivatives of the licensed software products. At the beginning of the letter, Mr. Wilson explained: “We have sent a letter to all our licensees who have also acquired sublicensing rights to address an issue that is of great concern to AT&T.” Exh. 19 at 1. He then continued:

“We want to stress at the outset that licensees may not distribute, or permit access to, any licensed source code software product (either in modified or unmodified form) to any third party at any time, or distribute sublicensed products based on such software products or its derivatives, unless specifically permitted by the license agreement.” Id. (emphasis added).

Mr. Frasure’s prior testimony similarly contradicts his recent declaration for IBM. In the BSD case, Mr. Frasure testified specifically about AT&T’s protection of the entire universe of products that could be created as a result of UNIX exposure, regardless of whether the resulting product actually contained UNIX code:

“if you’ve got a group of people over here developing a set of source code and they have never seen the Unix source code, they’ve never been too exposed to it and the [sic] develop a product completely on their own, then that’s one thing. But if they’re developing a product with the benefit of Unix or perhaps they have used it for -- for a number of years, ten years, and then they think they’re going to go off and develop something on their own that’s an operating system that may look like Unix, we had – we expressed our concern that -- that we had an interest in that product.” Id. at 20 (emphasis added).

Mr. Frasure later reiterated that same point:

“Q: But assuming – when you said it’s possible, you were saying it’s possible that this agreement was saying they should distribute it to anyone so long as it did not include the licensed software of [sic] disclose methods or concepts used in the licensed software?
A: My interpretation of this is if – if you were developing software modifications without the benefit of the licensed software, then you could distribute those, but if you developed them with the benefit of the licensed software that you could not distribute them to anyone in this case if you mean anyone who is a non-licensee.” Frasure Dep. (12/8/92) at 42 (Exh. 9) (emphasis added and objection omitted).

When pressed about the scope of AT&T’s contractual protections, Mr. Frasure could cite only one “clear cut hypothetical case” that would leave a licensee free to develop a product that would not be subject to the use and disclosure restrictions of AT&T’s license agreement:

“I say if it was developed independent of the licensed software and without benefit of it, then to me that’s a -- that is the licensee’s product. In other words, if they were completely separate and divorced from this and the people who developed that product didn’t have the benefit of the knowledge of this product. I mean there are -- there are companies that developed software products all the time without the benefit of this, and introduce them.

* * *

That if a -- a company -- a licensee had a facility and people in it that never had -- had used the UNIX source code and they set off and they developed a product on their own, then I -- in my opinion, then AT and T has no interest in that product.” Id. at 166-167.

And, when asked about the implications of this view, Mr. Frasure reiterated that the AT&T agreements were designed to protect various possible products that could be developed from mere exposure to the licensed UNIX product (and precisely the types of developments and circumstances that IBM now attempts to defend in this action):

“Q: Forgive me. I don’t know that I understand your hypothetical completely. This is -- if an AT and T licensee has a licensed UNIX operating system and they’ve looked at it and they’ve worked with it, then they go ahead and develop a product that doesn’t have actual source code, object code, documentation, or methods and concepts of AT and T’s, is it my understanding -- do I understand you to be saying that that licensee’s product falls under the definition of licensed software?
A: I don’t -- I really don’t think that I can answer the -- the question clearly. I guess I have my -- it’s very difficult to try to answer some of these questions, because I think of the methods and the concepts issue. There’s a -- I’ve used the term at least one time, mental contamination if you will, of being -- being exposed to a product. You know, I think a clear cut hypothetical case would be that if you have a licensee and they have two physical locations and you’ve got this group out here that’s never seen the UNIX source code and they go off and they develop a product, then I would think clearly that that is that licensee’s product and AT and T has no interest in it. However, if the other location that had access to that source code and there were people working on that new product that had worked with the UNIX software to some extent -- I don’t know that that extent is because we’re talking in general terms here -- then I would think that there’s a chance that AT and T would have an interest in that product.” Id.

Lastly, and further illuminating the critical contractual concern about licensees’ exposure to the UNIX product, Mr. Frasure recalled a meeting that he had attended with Otis Wilson, Geoff Green (the sole attorney who has signed a declaration submitted with IBM’s motion), and representatives of one of AT&T’s licensees. Testifying about that meeting, which occurred in late 1984, id. at 96-97, Mr. Frasure repeatedly described the concept of “mental contamination” that he and Mr. Wilson had communicated to licensees concerning the expansive scope of the protections provided under the license agreements:

“Q: And if your code was not part of the product?
A: Well, if it was used as part of the development -- I really need to be careful here on words, I guess. If the source code, the Unix source code was -- was required, was used to generate the enhancement, was required to have the -- the rest of the enhancements work, then we had an interest in it. It’s been a long time. I’m not sure of the right -- the right key words to use, but we went through those discussions with them and what we felt the, you know, the agreement said.
We also discussed contractor provisions which allowed a licensee to contract with someone to develop software and then when that development was done everything had to come back to them and we expressed concern I guess with -- Otis [Wilson] and I used the term mental contamination, that if you had been exposed to the source code and its methods and concepts, even though you give something back to the -- the licensee, there was – there was concern there that someone could go off on their own and develop what they thought was their own product but really using the methods and concepts and techniques that were in the product that they had previously used.” Id. at 18-19 (emphasis added).

Second, IBM’s declarants now specifically contend that AT&T never intended to protect any UNIX modifications and derivatives made by licensees, so long as actual source code was not contained in the modification or derivative. Wilson Decl. (April 2004) ¶ 14 (Exh. 16) (“[A]ny source code developed by or for a licensee and included in a modification or a derivative work would not constitute ‘resulting materials’ to be treated as part of the original software product, except for any material proprietary UNIX System V source code provided by AT&T or USL and included therein.”); Frasure Decl. (March 2004) ¶ 28 (Exh. 18) (“In all cases, as I understand the agreements and believe they were intended, modifications and derivative works are not subject to restrictions contained in the license agreements on use, export, disclosure or transfer (except for any licensed UNIX System V source code actually included therein) because they are owned by the licensees.” (emphasis added)).

Again, however, in their prior sworn testimony, Mr. Wilson and Mr. Frasure affirmatively rejected such a restrictive interpretation of the AT&T license agreements and, in fact, ascribed to those agreements the broad protections clearly evinced by the contractual language. In the BSD case, Mr. Wilson testified: “My understanding is that anything created by the university with exposure to the licensed software, based on, contained, a part of, was a derivative work with regard to these documents and had to be treated as licensed software.” Wilson Dep. (12/10/92) at 51 (Exh. 15) (emphasis added).22 It is hard to imagine a broader statement regarding the protected material.

Mr. Wilson confirmed this view when asked about a letter in which AT&T clarified the meaning of “LICENSED SOFTWARE” in the University’s agreement:

“Q: And under this clarification, as you understand it, not every derivative work prepared by the licensee was required to be treated as licensed software, is that right?
A: I did not say that.
Q: I’m asking you is that your understanding?
A: Not, it’s not.” Id. at 43 (emphasis added).
As Mr. Wilson further explained: “That which was created by the university independent of any exposure to the licensed software belonged to the university and we would not even had these types of discussions. These discussions and these agreements only came up when there was exposure to the licensed software.” Id. at 49-50 (emphasis added). Thus, Mr. Wilson’s prior testimony was that, after the licensee had been “exposed” to the UNIX System V source code, “every derivative work prepared by the licensee” had to be treated like the licensed source code.

Similarly, in Mr. Frasure’s BSD testimony, he actually corrected the very mistake made by IBM in this case, in response to a question from BSD’s counsel:

“Q: Would that – could you tell me the components of what your understanding in May ’85 would have been included in the licensed software? If you recall what your understanding was in 1985.
A: Licensed software would have been . . .
Q: Would it have been the source code?
A: … would have been the source code or some portion of it, with modifications made to it by the licensee.
Q: Where do -- where do you get the understanding that a modification to the source code falls within the definition of licensed software?
A: It says licensee agrees that any modifications or derivative work prepared by it that contains any licensed software . . .
Q: Okay.
A: . . . shall be treated . . .
Q: Okay.
A: . . . as licensed software.” Frasure Dep. (12/8/92) at 146 (Exh. 9) (alterations in original) (emphasis added).

In fact, Mr. Frasure recounted how he and Mr. Wilson had been informed of a licensee’s plans to distribute a derivative product, and how they informed the licensee that “we’ll have to bring a suit against you to stop that.” Id. at 22. Asked to characterize the software, Mr. Frasure stated that it was an “add-on type product” to the original UNIX product. When confronted with the basis for such a lawsuit, Mr. Frasure denied the need for actual UNIX source code to have been present in the new product:

“Q: And what was it about what they were planning to distribute that caused you to consider that possibly a violation of the agreement if they pursued it?
A: Because Unix source code had been instrumental in its development.
Q: Was the Unix source code -- was Unix source code included in the product they were planning to distribute?
A: I don’t know, ‘cause we were never told.
Q: Was that something that you asked about at the meeting?
A: I’m sure we did. I don’t recall a specific instance of -- of that. I wish I could recall the specific software that we were talking about, but the -- we considered at the time that the ... the product was a --it was based on Unix, it was -- could be an enhancement or a modification to the operating system.” Id. at 23.

In further defining the concept of derivative and modification work, Mr. Frasure supported the very claim that IBM now belittles -- that even significant additions and enhancements to UNIX would be considered derivates and modifications subject to the licensing agreement protections. Mr. Frasure testified that he always “conveyed to the licensees or whoever we were talking to that a modification was an addition or change to or the deletion from.” Id. at 118. Mr. Frasure stressed that the modification label , once attached, remained on newly developed code, regardless of how much was added to the initial product: “a modification is a modification and that involves three things, and you can add one line of code or a thousand lines of code or ten thousand.” Id. at 121.

Mr. Frasure asserted that the licensing agreements’ protection of derivative work extended the above protections to modified products that could operate independently:

“Q: Okay. And then I would also like to ask you about derivative work, and I’m not asking you for a legal conclusion, I’m just asking for your common understanding of that in your dealings with the University and as an employee of AT and T. Did the definition of a derivative product or work vary in any way from what you’ve earlier testified is a modification, or is it somehow different?
A: Well, derivative product is a result of the modifications, and we -- I -- I guess I consider the derivative product to be something that you would -- it would be executable or usable in its entire form. In other words, it’s a -- it’s a product that will stand on its own, but it’s strictly as a result of the modifications that have been made to the -- to the software.” Id. at 119.

Third, IBM’s declarants now deny that AT&T sought to protect the methods and concepts embodied in UNIX System V, again in the face of plain contractual language to the contrary. Mr. Wilson’s declaration now states that, at least as of February 1985, AT&T did not seek to protect the methods and concepts embodied in UNIX System V:

“In fact, we were not aware of any particular ‘methods or concepts’ that needed to be protected. We made up this phrase as sort of a general catch-all. We were willing to delete the reference to methods and concepts in the IBM agreement because we were not aware of any UNIX System V methods or concepts that required protection. The fact that we had distributed the UNIX System V source code so broadly that the internal structure of the UNIX system V operating system was well known in the academic community and by computer programmers generally.” Wilson Decl. (Dec. 2003) ¶ 14 (Exh. 21).

See also Frasure Decl. ¶ 12 (Exh. 18) (claiming that the licensing agreement provisions were not intended “to restrict our licensees’ use export, disclosure or transfer of anything besides the licensed UNIX System V source code and related materials”).

But just prior to and well after the IBM Side Letter was signed in February 1985, Mr. Wilson (on behalf of AT&T) repeatedly and expressly sought to protect UNIX “methods and concepts” pursuant to AT&T’s license agreements. For example:

  • In his letter to Digital Equipment Corporation (“DEC”) dated Sept. 5, 1984, Mr. Wilson wrote: “Regarding Section 2.01 of the referenced Software Agreement, you do not have all right, title and interest in derivative works based on a SOFTWARE PRODUCT if such derivative works include any of our code or embody any of the methods and concepts used in a SOFTWARE PRODUCT.” Exh. 22 at 2 (emphasis added).

  • In proposed (and later executed) letter agreements dated June 18, 1990, June 29, 1990, and August 3, 1990, Mr. Wilson stated to other licensees: “You will not provide access to any copy of the source code of the SOFTWARE PRODUCT (including methods and concepts contained therein), in whole or in part, to anyone other than your organization’s employees who have a need to know.” Exhs. 23, 24 & 25 (emphasis added).

Such statements plainly belie Mr. Wilson’s current claims that by the time of the IBM Side Letter in 1985, “we were not aware of any UNIX System V methods or concepts that required protection” and that AT&T “had distributed the UNIX System V source code so broadly” that no protection for methods and concepts could obtain.

Mr. Frasure, for his part, testified in the BSD case that AT&T sought to protect far more than merely UNIX source code through its “methods and concepts” provision. Mr. Frasure clearly stated, “the licensed software to me encompasses methods and concepts techniques,” so that “to the extent at some point [a licensee] gets involved with the source code, than I – and its methods and concepts, then I think there -- there’s a restriction on its -- on its use.” Frasure Dep. (12/8/92) at 45-46 (Exh. 9) (emphasis added). Acknowledging that AT&T’s software license agreement undoubtedly protected actual UNIX source code, Mr. Frasure stressed that there is “more to the agreement” and proceeded to point to “other portions of paragraphs that cover methods and concepts and – and stuff.” Id. at 37 (emphasis added). In fact, Mr. Frasure characterized these protections as a “key part of the agreement.” Id. at 147.

When asked point blank about the types of products covered by AT&T’s licensing agreement, Mr. Frasure responded as follows:

“Q: So licensed software – your understanding of licensed software in the 1985 time period in the System Five license agreement could include source code of AT and T’s; is that correct?
A: Yes.
Q: Okay. And it could include object code of AT and T’s as well?
A: Yes.
Q: Okay. And it could also include documentation of AT and T’s; is that correct?
A: Yes.
Q: And it could also include methods and concepts of AT and T’s included in their System Five product; is that correct?
A: Yes.” Id. at 148.

Mr. Frasure also explicitly acknowledged the application of this methods and concepts protection to work created by a licensee’s programmers:

“if someone has been exposed to the source code and has used the source code and then goes off on their own and wanted to develop a product that subconsciously or through rote or whatever the words are developed a product that contained the methods and concepts, techniques that we’re using, then it’s -- I don’t know what the right word to use -- understanding, interpretation or what –- that –- that AT and T would have a -- an interest in that product.” Id. at 147-148.

And Mr. Frasure expressed his doubts about a licensee’s ability to develop genuinely independent, but related products after such exposure to UNIX:

“Q: Under what circumstances would they have an interest -- would AT and T have an interest in the licensee’s product because they had had mental access to the AT and T Unix operating system?
A: Well, I think the fact that they -- they had access to it -- I’m really not trying to be -- to be stubborn with you but techniques, methods and concepts are things that -- that we use in every day life that we have been trained -- we have learned by experience to use. I think that for someone to say, well, we’re not using AT and T’s methods and concepts is ... is a -- it’s a statement that -- someone may think that because they subconsciously aren’t aware that they were, but they could be, that’s why I have to answer the question by saying there’s a chance that they -- they do. I mean you do things for so long and develop styles and techniques, then for someone to say, well, it doesn’t contain AT and T’s methods and concepts, I -- I think may be hard to say if someone has worked with a product for -- for some number of -- period of time.” Id. at 169-70 (emphasis added).

Lastly, in describing the extent of AT&T’s protections of the “methods and concepts” derived from UNIX, Mr. Frasure delineated the scope of activities that could violate the provision prohibiting disclosure of such material:

“Q: Okay. But with respect to the methods and concepts, what is restricted in that paragraph is the disclosure of those methods and concepts.
Q: Is that right? Is that your understanding, in this paragraph?
A: Disclosure has many forms, so it -- if I look at the -- the word disclosure as having many forms, then -- then I would agree with that.
Q: Okay.
A: Not just -- not just one form, but many. You can reveal how things are done by the way you do other things, and that’s a disclosure.” Id. at 51 (emphasis added) (objection omitted).

In response to questioning about what products could be disclosed under the agreement, Mr. Frasure was hesitant to concede that any product remained unprotected, because even “if you develop your own system modifications and you use -- and it works with the software that was licensed, there is a -- there is a very good chance you are revealing methods and concepts just strictly through the interface technique that -- that’s used.” Id. at 41-42 (emphasis added). Mr. Frasure maintained this position even when asked about products that did not overtly disclose methods or concepts:

“Q: But assuming -- when you said it’s possible, you were saying it’s possible that this agreement was saying they should distribute it to anyone so long as it did not include the licensed software of [sic] disclose methods or concepts used in the licensed software?
A: My interpretation of this is if -- if you were developing software modifications without the benefit of the licensed software, then you could distribute those, but if you developed them with the benefit of the licensed software that you could not distribute them to anyone in this case if you mean anyone who is a non-licensee.” Id. (emphasis added) (objection omitted).

Fourth, IBM’s declarants now ignore any distinction between the ownership rights that AT&T expressly recognized through the IBM Side Letter and its subsequent license agreements, on the one hand, and the contractual restrictions that AT&T’s license agreements imposed, without exception, on the use, copying, distribution, and disclosure of products covered by those agreements. In so doing, they mistakenly claim that despite its plain language (which was expressly limited to ownership), the IBM Side Letter eviscerated all of the significant protections that AT&T’s license agreements afforded to the UNIX intellectual property. For example, Mr. Wilson now declares that by recognizing in the IBM Side Letter that AT&T would not claim any ownership interest in work developed by IBM, AT&T intended to give IBM

“the right to control modifications and derivative works prepared by or for IBM” such that “IBM (like all licensees under the agreements) fully owns any modifications of and derivative works based on UNIX System V prepared by or for IBM, and can freely use, copy, distribute or disclose such modifications and derivative works, provided that IBM does not copy, distribute or disclose any material portions of the original UNIX System V source code provided by AT&T or USL (except as otherwise permitted by the IBM Agreements).” Wilson Decl. ¶ 19-20 (Exh. 16) (emphasis added).

See also Frasure Decl. ¶ 18 (Exh. 18) (asserting that IBM Side Letter evinced AT&T’s intent not to “assert any right to control the use and disclosure of modifications and derivative works prepared by its licensees, except to the extent of the licensed UNIX System V source code included in such modifications and derivative works”).

Contrary to Mr. Wilson’s current declaration, however, at the time AT&T entered into its software license and side letter agreements with IBM, he repeatedly and expressly acknowledged the distinction he now ignores between licensees’ “ownership” of modifications and derivative works, on the one hand, and their “use, copy, distribute, or disclosure” of such works, on the other ? while confirming (again) that AT&T’s license agreements protected UNIX “methods and concepts.” In Mr. Wilson’s letter to DEC dated Sept. 5, 1984, for example, he explained:

“If such derivative work does include any of our code or embody any of our methods and concepts you may have a property right in such derivative works to the extent of any modifications that you have added, but the exercise of that property right is subject to the terms of the Software and Sublicensing Agreements, including to the restrictions on the use of the SOFTWARE PRODUCT (for example, it must be kept in confidence).” Exh. 22 at 2 (emphasis added).

Mr. Wilson reiterated this statement in a later letter to DEC on February 21, 1985 – twenty days after AT&T entered into the license agreement and side letter with IBM. See Exh. 26 at 3. These statements plainly belie Mr. Wilson’s contention that neither AT&T nor its license agreements drew any distinction between the licensee’s ownership of certain material and the restrictions on its use of even that material.

Likewise, when Mr. Frasure was asked in the BSD case about contractual language that was substantively similar to the “Regarding 2.01” provision in the IBM Side Letter, he made clear that the contractual statement of ownership did not in any way alter the contractual restrictions on use and disclosure:

“Q: So that if an AT and T licensee developed a software that was a modification or derivative work which did not contain source code, object code, documentation or methods and concepts of AT and T’s, AT and T did not assert an ownership interest in that product. Is that your understanding – was that your understanding in May of 1985?
A: It has no ownership in that portion of the product.
Q: Okay.
A: But it doesn’t mean that it’s not part of the licensed software, I don’t think. I think there’s two -- two things here that we’re talking about, licensed software and -- and ownership, which I think are two completely separate subjects.” Frasure Dep. (12/8/92) at 151-152 (Exh. 9).

Mr. Frasure reiterated that distinction numerous times in his BSD testimony:

I still feel like we’re talking about -- about two separate things here. One is ownership and one is what is the licensed product.” Id. at 166-167.

And, in addressing the implications of that distinction, he further explained:

A: “I feel like there’s been perhaps some confusion or interchange of words incorrectly regarding one completely separate subject to me, which is ownership, and the other is licensed software, and the two are not interchangeable, so that was the reason that I attempted to make a distinction before.

* * *

“ownership, to me is a very clear and distinct subject from the licensed software product. If ... if you generate the code, add the code to it then I think, clearly the software agreement and the side letter said that you owned that. That didn’t say that it was not part of the – the software licensed product . . .

Q: So what are you suggesting? You owned it but because it was part of the agreement, what does that ... can you tell me the significance of that?
A: Well, I ? I’m just saying I want to make a distinction. I’m not sure where we are going with this. It’s just that I’m saying that the ownership belongs clearly to the originator of -- of that code, but it -- it could be construed to be part of the software product.” Id. at 157-59. (ellipses in original) (emphasis added).

Lastly, Mr. Frasure used this fundamental distinction to explain the textual change, later in 1985, to conform AT&T’s software agreement to the substantially similar ownership language in the IBM Side Letter: “all we were trying to do is to clarify that there was – they [the licensees] owned the – the modifications, any – any derivative or enhancements that they made to the product, but it was also going to be treated as part of the product.” Id. at 103; see also id. at 111 (specifying that the change to the language in AT&T’s standard license agreement was designed to “reduce the number of side letters to licensing agreements that would clarify the ownership issue”).

Therefore, at an absolute minimum, the prior testimony of Messrs. Wilson and Frasure not only contradicts IBM’s position that AT&T did not protect, and was not interested in protecting, anything other than literal UNIX source code, but also demonstrates that AT&T actually sought through its license agreements to protect any product that a licensee made after having been given access to UNIX. Based even on that limited reading of those witnesses’ prior testimony – given much closer in time to the execution of the agreements at issue – IBM could not be entitled to summary judgment based on the extrinsic evidence it has submitted (which, other than the testimony of Messrs. Wilson and Frasure, has not been tested at all). Furthermore, as explained in greater detail herein, these statements also demonstrate why the discovery that IBM has failed to produce regarding the evolution of AIX and Dynix is essential, to permit SCO to show that source code IBM has contributed to Linux was developed through “exposure” to and “with the benefit of” the licensed UNIX product, represented modifications or derivatives “based on” that product, and/or contained “methods and concepts” from the UNIX product. See Part III, below.

The Sworn Declaration of Martin Pfeffer,
AT&T’s Chief Attorney on UNIX Licensing Protections

In addition to the prior statements of IBM’s own declarants, testimonial evidence that SCO has thus far secured – in the face of the recurring discovery obstacles IBM has imposed – unmistakably supports SCO’s reading of the clear and unambiguous contractual language.

At the very time that AT&T entered into its licensing agreements with IBM and Sequent, AT&T General Attorney Martin Pfeffer, an intellectual property specialist, was primarily responsible for participating in, supervising, and approving AT&T legal department’s drafting of, and enforcing, the terms of AT&T’s UNIX license agreements. Pfeffer Decl. ¶¶ 3-4, 11 (Exh. 27). Mr. Pfeffer’s sworn declaration is consistent with SCO’s contract interpretation and the prior testimony of IBM’s declarants, and directly undermines IBM’s summary judgment motion. Mr. Pfeffer’s declaration confirms the following:

  • Section 2.01 of AT&T’s license agreements was intended to provide expansive coverage to any modifications or derivatives of the original licensed UNIX product. Mr. Pfeffer’s sworn declaration explains that Section 2.01 “set forth the parties’ intent and agreement that the ‘SOFTWARE PRODUCT’ licensed and protected under the terms of the license agreements included the full content of all of the ‘resulting materials’ created over time from the licensees’ exercise of their contractual ‘right to modify’ and ‘to prepare derivative works’ based on the original licensed material.” Id. ¶ 6. Thus, according to Mr. Pfeffer, “under Section 2.01, if a licensee created a modification or derivative work based on the original licensed product, then the agreement treated the ‘resulting’ work as if it had been part of the original SOFTWARE PRODUCT, and any further modifications or derivatives of that ‘resulting’ work would be treated in the same manner.” Id.

  • The ownership language contained in the IBM Side Letter was not intended to release any licensee from the contractual restrictions on its use, copying, distribution, or disclosure of materials covered by the license agreements. Mr. Pfeffer recalls that in 1985, AT&T added language to its license agreements “to address inquiries from certain of its licensee concerning the ownership of modifications and derivative works.” Id. ¶ 7. According to Mr. Pfeffer, the language that AT&T added to its agreements (which is substantially similar to the “Regarding 2.01” clause in the IBM Side Letter) “set forth the parties’ intent and agreement concerning only the ownership of modifications or derivative works, and that this language was not intended to change, and did not in fact change, AT&T’s right to control (for example, the use and disclosure) of such modifications and/or derivative works, as set forth in Section 2.01 and other provisions of the software license agreements.” Id. Moreover, Mr. Pfeffer does not recall during his tenure with AT&T and USL (which lasted from 1962 through 1993) “any such instances in which AT&T or USL changed or agreed to change the contractual limitations on use and disclosure that were set forth in the UNIX license agreement.” Id.

  • Section 7.06 of the AT&T license agreements was intended to provide broad confidentiality protections. According to Mr. Pfeffer’s sworn declaration, the general requirement of confidentiality (usually contained in the first sentence of Section 7.06(a)) of the license agreements, “set forth the parties’ intent and agreement that the ‘SOFTWARE PRODUCTS’ covered by the license agreements (and, pursuant to Section 2.01, any modifications or derivative works ‘based on such SOFTWARE PRODUCT’) would be subject to the restrictions set forth in AT&T’s confidentiality provision, regardless of the licensee’s ownership interest in any part of such SOFTWARE PRODUCTS.’” Id. ¶ 8. Moreover, Mr. Pfeffer explained, the further specific protection for “methods or concepts” found in the Sequent license agreement was “specifically designed to cast the widest possible net in order to ensure protection for AT&T’s proprietary information, beyond the common law protections that would otherwise have been available (absent the agreement) for AT&T’s trade secrets and ‘know-how.’” Id. ¶ 9.

  • AT&T’s UNIX license agreements were specifically designed to protect far more than just literal UNIX source code. According to Mr. Pfeffer, “it was AT&T’s intent to prevent through its UNIX license agreements the unauthorized use and disclosure of more than just literally copied UNIX source code.” Id. ¶ 10. Thus, “AT&T intended to protect, and through its standard license agreements expressly protected, its UNIX business by preventing anyone from using AT&T’s proprietary material in UNIX (including by literally or non-literally copying UNIX source code, disclosing methods or concepts from UNIX, and/or exploiting licensees’ access to the technology in UNIX) without paying UNIX license fees to AT&T.” Id. Mr. Pfeffer further explained: “AT&T effected this protection through its license agreements by, among other things, requiring licensees to treat all materials resulting from any exercise of their ‘right to modify’ and ‘to prepare derivative works’ as if such materials had been ‘part of the original SOFTWARE PRODUCT’; by specifically requiring licensees to hold AT&T’s ‘SOFTWARE PRODUCTS subject to this Agreement in confidence for AT&T’; and by strictly controlling the disclosure of ‘any or all of such SOFTWARE PRODUCTS (including methods or concepts utilized therein).’” Id.

  • The License agreements’ protection of more than literal UNIX source code was never subject to negotiation. Mr. Pfeffer does “not recall any instance during my tenure in which either AT&T or USL agreed (in any license agreement or supplement or modification thereof) to reduce its protection under a UNIX license to prevent the unauthorized use or disclosure of only source code.” Id. ¶ 11. According to Mr. Pfeffer, any such change would have represented “a significant and material change to the standard terms of AT&T’s license agreement” that would have required his, or to a lesser extent Burt Levine’s, approval. Id. Not only does Mr. Pfeffer confirm that no such change was ever made, but he does not even recall any such “proposed” modification to AT&T’s standard license agreement. Id.

  • The integration clause in the licensing agreements was intended to prevent the terms of any agreement between AT&T and one licensee from affecting the rights and obligations of any other licensee. Mr. Pfeffer’s sworn declaration reiterates that the standard integration language in AT&T’s licensing agreements “set forth the parties’ intent and agreement that only the terms of each licensee’s written agreements with AT&T would govern those parties’ contractual obligations. Id. ¶ 12. In other words, any agreements (including any side letter agreements) that AT&T entered into with one of its UNIX licensees would have no legal effect on the contractual obligations of AT&T vis-à-vis any of its other UNIX licensees.” Id.

Accordingly, the limited extrinsic evidence available to date defeats IBM’s motion and demonstrates why further extrinsic evidence discovery – including testing the other declarations on which IBM relies – is warranted (if extrinsic evidence is to be considered at all on the contract interpretation issues). The foregoing evidence also illustrates precisely why the license agreements clearly require that any modifications or derivatives of the licensed Software Product must be treated as part of that Software Product: AT&T was greatly concerned that as a result of the “contamination” that would follow from licensees’ access to AT&T’s intellectual property, those licensees would create modifications and derivative works that copied AT&T’s intellectual property (even if they did not include literal copying of UNIX source code). The foregoing deposition of Messrs. Wilson and Frasure also demonstrates why, given the evidence of AT&T’s intent in and own interpretation of its license agreements, SCO is entitled to discovery in order to demonstrate that the AIX and Dynix source code – including source code contributed to Linux – was written “with the benefit of” the UNIX source code.

B. IBM’s “Waiver” Arguments Are Patently Meritless

IBM also attempts to avoid any further scrutiny of its conduct by claiming entitlement to summary judgment on the ground that its breaches of the license agreements were purportedly “waived.” IBM Contract Mem. at 71-74. The question of waiver, however, is “generally ill-suited for summary adjudication.” In re Caldor, Inc., 217 B.R. 121, 133 (Bankr. S.D.N.Y. 1998); see also Boston Concessions Group v. Criterion Ctr. Corp., 606 N.Y.S.2d 696, 697 (App. Div. 1994) (“[U]nder New York law, the establishment of a waiver, requiring the relinquishment of a known right, is ordinarily a question of fact which precludes summary judgment.”). And, as explained below, IBM’s two “waiver” arguments provide no basis for departing from that rule.

1. IBM’s Claim that Novell Has Waived SCO’s Rights Relies on an
Indefensible Misreading of the UNIX Asset Purchase Agreement.

IBM first contends that Novell, on SCO’s behalf, has waived IBM’s breaches of the license agreements by the supposed authority of the Asset Purchase Agreement between Novell and SCO’s predecessor-in-interest The Santa Cruz Organization, Inc. (hereinafter “SCO”), which was dated as of September 19, 1995 (the “APA”) (Exh. 28). IBM Contract Mem. at 72. For this argument, IBM relies on an indefensible reading of the APA, which removes snippets of text from their context while ignoring the key contractual provisions as well as the unmistakable deal structure and parties’ intent.

In 1995, Novell sold to SCO its entire UNIX-related business. The APA expressly transferred to SCO “all of Seller’s right, title and interest in and to” the specified assets, which included, among other things, the following: (1) “All rights and ownership of UNIX and UnixWare,” including, among other things, the UNIX source code; (2) “All of Seller’s rights pertaining to UNIX and UnixWare under any software development contracts, licenses and any other contracts,” including, among others, the UNIX “Software and Sublicensing Agreements – This includes the source code and sublicensing agreements that Seller has with its OEM, End User and Educational customers”; and (3) “All contracts relating to the SVRX Licenses” for, among many others, all versions of UNIX System V that had been licensed to IBM and Sequent. See APA at Schedule 1.1(a), I, III, VI (Exh. 28).

The sole exception to the wholesale transfer of UNIX rights under the APA is Novell’s retention of the limited right to receive future royalties paid by UNIX binary code licensees under UNIX System V licenses. See id. at Schedule 1.1(b), VIII (reserving for Novell “All right, title and interest to the SVRX Royalties, less the 5% fee for administering the collection thereof pursuant to Section 4.16 hereof.”). This arrangement was designed as a pricing mechanism; because SCO could not pay Novell the full purchase price up front, SCO agreed to permit Novell to retain these future royalty streams to bridge the price gap. Id. § 1.2(a)-(b) (specifying as “Payments” for “the transfer of the Assets by Seller to Buyer” both SCO common stock and “the SVRX Royalties as defined and described in Section 4.16 hereof”).

Despite the clearly expressed purpose of the APA to transfer all rights relating to UNIX source code licenses to SCO, IBM quotes a portion of section 4.16(b), out of context, and contends that it gives Novell the power to “waive” all of SCO’s rights (including the intellectual property protections) under the UNIX System V licenses. The text and context of section 4.16 make clear, however, that the sole purpose of that section is to set out the rights and obligations of the parties with respect to the binary royalty income stream that Novell retained through the APA. Thus, Section 4.16(a) sets forth the procedures to be followed in the collection, administration, and payment of the SVRX binary royalties, granting Novell the right to audit SCO’s collection of those revenues in order to protect its going-forward interest in the SVRX Royalties. See id. § 4.16(a). And Section 4.16(b) further protects Novell’s binary royalty rights by prohibiting SCO from compromising those rights under the SVRX agreements without Novell’s consent and by requiring SCO to take certain actions under the SVRX agreements at Novell’s direction. IBM’s argument based on its selective quotation from Section 4.16(b) thus ignores the critical context of that provision which, together with the key terms of the APA, clearly demonstrate that 4.16(b) did not, and was not intended to, give Novell the unfettered right to destroy the value of the assets that SCO purchased by giving away SCO’s intellectual property protections under the SVRX source code software licenses.

SCO and Novell subsequently affirmed this understanding – in language that IBM’s motion overlooks entirely – through the October 1996 Amendment 2 to the Asset Purchase Agreement. Exh. 29. In addition to acknowledging that the APA had transferred to SCO “the copyrights and trademarks owned by Novell as of the date of the Agreement required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies,” id. ¶ A, Amendment 2 reiterated that Novell had no “right to increase any SVRX licensee’s rights to SVRX source code,” no “right to grant new SVRX source code licenses,” and no right to “prevent SCO from exercising its rights with respect to SVRX source code in accordance with the Agreement,” id. ¶ B.5.

IBM thus interprets the APA to create an unreasonable result that the parties never intended. See, e.g., In re Lipper Holdings, LLC, 766 N.Y.S.2d 561, 562 (N.Y. App. Div. 2003) (citations omitted) (a “contract should not be interpreted to produce a result that is absurd, commercially unreasonable or contrary to the reasonable expectations of the parties”). As noted above, under IBM’s interpretation, Novell could unilaterally permit any licensee to disclose material protected by the confidentiality provisions – thereby eviscerating the value of the assets SCO purchased. Moreover, if Novell could waive SCO’s intellectual property protections under the SVRX agreement, there would have been no reason for Novell to have taken out an SVRX source code license from SCO concurrent with the consummation of the APA, see APA § 1.6 (Exh. 28), and the express, stringent restrictions on Novell’s use of that code – e.g., “for internal purposes” only, id. – would have been worthless to SCO, the licensor. Indeed, if Novell could waive any of the restrictions of its own SVRX source code license, as IBM’s extreme contract reading suggests, then Novell could even continue its UNIX business in competition with SCO, rendering the APA itself a nullity. The Court could not reasonably, and certainly could not as a matter of law, ascribe any such reading to the APA or any such intent to the contracting parties.

2. IBM’s Argument for Summary Judgment on the Ground That
SCO Waived Its Own Rights Under the Contracts Is Meritless.

IBM also claims that SCO itself has “waived” IBM’s breaches relating to its improper contributions to Linux on the ground that SCO sold to customers, and allegedly made available on the Internet, code that IBM had improperly contributed to Linux. IBM Contract Mem. at 74. IBM’s argument is wrong, and it does not remotely raise an issue that the Court could resolve in IBM’s favor on summary judgment.

“A waiver is the intentional relinquishment of a known right with both knowledge of its existence and an intention to relinquish it.” City of New York v. State, 40 N.Y.2d 659, 669 (1976); see also Davison v. Kless, 280 N.Y. 252, 261 (1939) (“Whether an alleged waiver is express or implied, it must be intentional.”). “Waiver requires the voluntary and intentional abandonment of a right which, but for the waiver, would have been enforceable.” Gen. Motors Acceptance Corp. v. Clifton-Fine Sch. Dist., 85 N.Y.2d 232, 236 (1995) (internal citations omitted). To relieve itself of its breaches of contract, IBM has the burden of proving that SCO intended to waive IBM’s breaches, even while drawing all factual inferences in SCO’s favor. 23 IBM’s motion does not remotely carry this burden.

Far from evincing a knowing intent to relinquish its rights under the UNIX license agreements, SCO has diligently sought to protect and enforce those rights since almost immediately after it learned of IBM’s intention to breach its obligations. Within weeks of IBM’s announcement that it intended to “obliterate UNIX” by exploiting its AIX expertise in Linux development, SCO notified IBM of SCO’s intention to terminate IBM’s license agreement due to IBM’s breach. After delivery of the termination notice in accordance with Section 6.03 of the license agreement, SCO attempted to meet and confer with IBM, but IBM failed to make any effort to cure its breaches during the two-month grace period provided in SCO’s termination letter. Accordingly, effective June 13, 2003, SCO terminated IBM’s System V licenses. This same process played out with respect to the Sequent license agreement, which was terminated effective July 30, 2003. SCO then promptly filed the present suit alleging, among other things, IBM’s breach of both the IBM and Sequent agreements.

IBM’s argument thus necessarily reduces to the claim that SCO impliedly waived the contractual rights it has diligently sought to protect and enforce in this lawsuit. That argument fails on the law and the facts. It has long been the law in New York that questions of implied waiver are never appropriate for summary judgment: “where a waiver is not express, but found in the acts of a party, summary judgment is not appropriate. An implied waiver is invariably a matter of intention and, therefore, an issue of fact.” McDarren v. Marvel Entertainment Group, Inc., No: 94 CIV. 0910 (LMM), 1995 WL 214482, at *5 (S.D.N.Y. Apr. 11, 1995) (internal citations omitted) (Exh. B); accord Gary v. Peckham, 468 F.2d 1241 (10th Cir. 1972) (“The question of implied waiver (and there is no contention that there was an express waiver) is an issue of fact which is to be decided only after an evidentiary or factual hearing.”).

In addition, even the facts that are available now, before discovery has closed, plainly belie IBM’s suggestion that SCO impliedly waived IBM’s breaches by distributing and making available Linux after SCO filed its suit. See IBM Contract Mem. at 76. It is illogical to suggest, as IBM does here, that a clear and unequivocal intent to waive certain rights can be inferred from acts taken after the filing of suit to protect those rights; and IBM has not located a single case to the contrary.

Moreover, IBM relies for its motion on an inaccurate presentation of the facts; for example, contrary to IBM’s claims, SCO did not make Linux available to the general public on its website after it filed this suit. In accordance with its preexisting contractual obligations to its customers, to whom SCO owed continued upgrades, maintenance, and service, SCO made certain Linux products available on its website to its customers only and on a non-public (and later password-protected) basis. Once SCO learned that non-customers had been able to access the products despite the password protection, it promptly removed all Linux products from its website.

Further factual development will reveal that IBM’s “waiver” argument is simply another attempt by IBM to exploit its own improper conduct. IBM cannot plausibly claim that SCO’s intentions with respect to its rights were unclear at any point IBM identifies. Instead, IBM asserts that its own impermissible actions in breach of the license agreement created a situation whereby SCO had only two choices when it learned of IBM’s breach: abandon its customers and its Linux business overnight – and inflict the maximum amount of damage on those customers and itself because of IBM’s violation or immunize IBM for its long, undisclosed course of improper conduct. IBM demands the right to put SCO to this impossible choice even though there is nothing SCO could have done to undo IBM’s basic violation at the time in question, and IBM even asks the Court to grant it this immunity as a matter of law. No precedent remotely supports such a perverse result, which would effectively permit the fact and extent of IBM’s wrongful conduct to absolve IBM from responsibility for that very conduct.

C. Even on Summary Review, the Facts That IBM Omits Preclude
Summary Judgment on IBM’s Eighth Counterclaim

IBM also now moves for summary judgment on its Eighth Counterclaim, which alleges that SCO has violated IBM’s copyrights in code that IBM contributed to Linux. In support of that motion, IBM contends that if SCO provides a release of potential claims based on its own software to a client who also uses Linux, SCO has somehow sold Linux in violation of the terms of the General Public License (“GPL”) or the Lesser General Public License (“LGPL”) (together, “the Licenses”) that pertain to Linux. This contention fails upon even brief review.

The GPL and LGPL both state, in their preambles (which IBM does not quote):

“When we speak of free software, we are referring to freedom of use, not price. Our General Public Licenses are designed to make sure that you have the freedom to distribute copies of free software (and charge for this service if you wish).” IBM’s Eighth Countercl. SJ Mem. Exhs. 26 & 27 at 1 (emphasis added).

Under the Licenses, derivative works made from works covered by the Licenses must “be licensed as a whole at no charge to all third parties under the terms of this License.” Id. ¶ 2. IBM quotes only the second half of this phrase, removing the “as a whole language,” and thus attempting to ignore the distinction between charging for a license and charging for other related products or services. In additional language that IBM fails to acknowledge, the Licenses both go on (in the same paragraph) to draw that distinction:

“it is not the intent of this section to claim rights or contest your rights to work written entirely by you; rather, the intent is to exercise the right to control the distribution of derivative or collective works based on the Program [in LGPL, ‘Library’]” Id. (emphasis added).

The GPL and LGPL thus clearly provide that while collecting “license fees” for Linux as a whole is not permitted, collecting other fees and specifically protecting one’s rights in one’s own intellectual property is.

IBM ignores this distinction and alleges that SCO has “collected, and attempted to collect, royalties and licensing fees from Linux users in excess of the fees permitted by the GPL and LGPL.” IBM’s Eighth Countercl. SJ Mem. ¶ 66. IBM makes that statement without any factual support. The Licenses contain no limitation on what fees can be charged for related products and services, and IBM does not offer any testimony or other evidence concerning any such limitations.

IBM instead bases its claims on two kinds of conduct. First, IBM relies on SCO’s efforts to enforce or resolve potential claims arising out of its intellectual property claims, including legal actions, press releases, and letters to users of Linux. See IBM’s Eighth Countercl. SJ Mem. ¶¶ 66(a)-(d), (h)-(j), (l)-(n). None of those activities could be considered “collecting a license fee or royalty” for Linux, and IBM points to nothing in the Licenses (nor is there anything) that either expressly or even impliedly forbids press releases, letters, public statements, or even legal actions aimed at enforcing a party’s intellectual property rights.

Second, IBM disingenuously claims that SCO has sold licenses for Linux to several companies. See IBM’s Eighth Countercl. SJ Mem. ¶¶ 66(e)-(g), (k). In addition to torturing the language and meaning of those licenses, IBM omits to mention that the agreements IBM cites contain releases of claims because they settle SCO’s potential legal claims against the licensee. Id. ¶ 3. Discovery (and a review of the “licenses” complained of by IBM) will show that all of them follow this same general form and none even purports to be a license for Linux.

In paragraph 66(f) of its brief, for example, IBM states: “On October 14, 2003, SCO sold Leggett & Platt, Inc. an ‘IP Compliance License’ for Linux. (Ex. 33.).” IBM thus quotes the term “IP Compliance License,” but not the word “Linux.” That is because Exhibit 33, an invoice for the license in question, neither covers Linux nor contains the word Linux anywhere in the document. IBM simply grafts that additional language onto the document to try to secure summary judgment on its own counterclaim before any discovery can be taken.

IBM’s reliance on a license that SCO sold to Questar is similarly inappropriate. That license, even as quoted by IBM, is one explicitly “to use SCO IP Rights . . . concurrent with run-time use of the Linux Operating System.” IBM’s Eighth Countercl. SJ Mem. ¶ 66(g) (ellipses in IBM original). IBM thus admits that this license does not even purport to be a license for Linux. The agreement defines “SCO IP Rights” (further language IBM declines to acknowledge) as “SCO’s intellectual property rights in any and all past, current or future versions or portions of the SCO’s software products commonly known as UNIX System V and/or UnixWare” concurrent with run-time use of Linux. The definition explicitly exempts Linux from its definition: “SCO IP rights shall not include any right to copy, distribute, modify or alter Linux Software.” IBM’s Eighth Countercl. SJ Mem. Exh. 34 ¶ 1.11 (emphasis supplied). The foregoing points illustrate how there is not merit to IBM’s suggestion that this agreement or any other evidences SCO’s attempt to “collect royalties and licensing fees” for Linux.

III. IBM MAY NOT FORCE ADJUDICATION OF ITS ALREADY PREMATURE
AND FACT-INTENSIVE DISPOSITIVE MOTIONS WHILE ALSO REFUSING
TO PRODUCE PREDICATE DISCOVERY NECESSARY FURTHER TO
DISPROVE THE PRECISE THEORIES OF THOSE MOTIONS

IBM not only is pressing its fact-intensive dispositive motions no less than six before the cut-off for fact discovery in the Court’s Amended Scheduling Order, but also expressly seeks to defend that tactic on the grounds that SCO could by now have taken depositions of material witnesses in this case. See Letter from B. Hatch to T. Shaughnessy dated Aug. 26, 2004 (Exh. 30), and Letter from T. Shaughnessy to B. Hatch dated Aug. 27, 2004 (Exh. 31). Yet IBM has taken every step to preclude SCO from obtaining even rudimentary discovery necessary for SCO to proceed with such depositions in a remotely complete or efficient way, and has done so while simply ignoring core theories of SCO’s claims (Part A, below).

SCO shows below, by way of example, how IBM has precluded – and how it has been in IBM’s interest to preclude – SCO from obtaining the discovery necessary to permit SCO to depose the material witnesses in this case regarding IBM’s interpretation of the license agreements (Part B, below). SCO further shows that the discovery IBM has failed to produce would itself bear directly on the merits of IBM’s contract motion (Part C, below).

A. IBM Brings Its Dispositive Motions in a Discovery Context
That Shows the Motions to Be Plainly Inappropriate

IBM seeks the adjudication of its motions in a context in which the Magistrate Judge granted (on March 3) SCO’s initial motion to compel adequate responses to certain initial discovery requests and required IBM to provide specified discovery that it had refused to provide and to supplement deficient responses, but IBM has yet to comply with that Order. IBM’s failure forced SCO to renew its earlier motion to compel – simply to secure compliance with the Court’s prior Order. See SCO’s Mem. in Support of Its Renewed Motion to Compel (July 6, 2004) (“Compel Mem.”) & Reply Mem. in Support of Renewed Motion to Compel (Aug. 26, 2004) (“Reply Compel Mem.”); see also Disc. Mem. and Reply Mem. re Disc.

The discovery SCO continues to await is necessary in order for SCO to undertake the following crucial steps to uncover more evidence contradicting the bases for IBM’s recent dispositive motions:

  • To use the information from that rudimentary discovery to identify the more targeted discovery necessary to permit SCO to move forward most efficiently under the Court’s Scheduling Order;

  • To use the rudimentary (and certain targeted) discovery to depose material witnesses, and to do so with as much information relevant to those witnesses as is practicable, so as not to waste the opportunity; and

  • To use information obtained in the foregoing ways to oppose the fact-intensive dispositive motions IBM is now pressing.

Unless discovery is permitted to occur in this order, SCO will be prejudiced by having to run the risk of wasting depositions (including potentially not being permitted to re-open depositions) before SCO has obtained the predicate discovery needed to complete them and make them useful.

SCO should be permitted to take the foregoing steps, and to use all of the other opportunities afforded to a litigant in the midst of fact discovery, during the time the Court permitted for such purposes in the Amended Scheduling Order. In any complex case, a litigant reasonably is entitled to the discovery that is relevant to the subject matter of a deponent’s testimony – that is why depositions typically await the production of substantial fact discovery. In this case, the Court also has imposed constraints on the number and time of the depositions the parties may take. In addition, since the Court imposed those constraints, IBM had added its multiple, sweeping counterclaims to the litigation – and yet refuses to increase the number of depositions available for each side. SCO therefore has reasonably awaited IBM’s long-delayed production of material plainly relevant to the depositions of the material witnesses in this case.

By refusing to permit that process to go forward, IBM has precluded SCO from obtaining discovery on numerous issues, including those bearing directly on IBM’s recent dispositive motions. In its July 9 opposition memorandum, for example, SCO demonstrates that it has not had the opportunity to uncover even a substantial amount of the evidence with which SCO would oppose IBM’s motion for summary judgment on its Tenth Counterclaim. See SCO’s SJ Opp. Mem. re IBM’s Tenth Counterclaim at 71-88.

Similarly, in support of its motion for summary judgment on SCO’s contract claims, IBM mischaracterizes SCO’s contract claims as resting entirely on the proposition that AIX as a whole and Dynix as a whole are modifications of, or are derived from UNIX System V. See, e.g., IBM Contract Mem. ¶ 62; see also Part II, above. IBM thus disregards its failure to produce predicate discovery relevant to SCO’s actual claims. SCO has made clear that IBM would violate the license agreements by contributing to Linux any material that included any non-literally copied UNIX source code or any UNIX method or concept. See, e.g., Reply Mem. re Disc. at 8-9. That is an interpretation of the license agreements that is much narrower than the one IBM now derides.

IBM then seeks to support its motion by alluding to SCO’s discovery responses and contending that SCO “fails to offer any evidence that IBM’s purported contributions to Linux (such as RCU, JFS, EVMS and AIO) – extracted from AIX and Dynix and standing alone – are modifications or derivative works of any code in UNIX System V,” IBM’s Contract Mem. at 52. What IBM does not tell the Court, however, is that IBM has blocked the discovery SCO needed to have provided the specific responses whose absence IBM now seeks to exploit. SCO has repeatedly demonstrated to the Court that only upon IBM’s production of specified discovery can SCO undertake reasonably and efficiently to identify the evidence showing that IBM has made contributions to Linux from UNIX derivatives and modifications. See Disc. Mem. at 3; Reply Mem. re Disc. at 7-15. At the same time, when SCO tries to obtain the evidence to support that narrower interpretation of the agreements – the identity of source code files contributed to AIX and Dynix by IBM and Sequent programmers – IBM tells the Magistrate Judge that the discovery is “wholly irrelevant.” IBM’s Mem. in Opp. to SCO’s Renewed Motion to Compel (Aug. 4, 2004) at 9.

If all IBM had contributed to Linux was its own, independently created source code, IBM’s foregoing strategy would seem to be unnecessary. More to the point, SCO’s mischaracterization of SCO’s contract claims and plain disregard for SCO’s discovery requests exemplify the impropriety of IBM’s dispositive motions.

B. IBM Has Failed to Produce Basic Discovery That Is a Necessary
Predicate to the Depositions of Material Witnesses Regarding SCO’s
Contract Claims and IBM’s Contracts Motion

IBM’s failure to produce long-sought and rudimentary discovery has precluded SCO from deposing two principal classes of material witnesses regarding SCO’s contract claims and IBM’s contracts motion.

AIX and Dynix Programmers. Over a year ago, SCO asked IBM to identify the programmers who have made contributions to AIX and Dynix and their specific contributions. In addition, the Court ordered IBM to produce that information over five months ago, in its March Order. Yet IBM has failed to provide any of that information. See Disc. Mem. and Reply Mem. Re Disc.; Compel Mem.; and Reply Compel Mem.

IBM initially claimed that the information was contained in the AIX program itself, but SCO showed in its Renewed Motion to Compel that IBM’s claim was not true – and IBM no longer argues otherwise. SCO further shows in its Reply Memorandum in support of its Renewed Motion to Compel that IBM now takes every step, however contradictory and incredible, to prevent the use of IBM’s CMVC System and Sequent’s RCS, which store all of the information regarding the precise contributions of each person to AIX and Dynix:

  • IBM first argued that it would take it “many, many months” to use CMVC and RCS to determine the programmer identities and contributions – notwithstanding that IBM is one of the largest computer companies in the world, and has marketed CMVC to its customers as a tool capable of easily producing the information SCO seeks; and

  • After SCO submitted material demonstrating that IBM could use CMVC and RCS without any significant burden to determine the programmer identities and contributions in a matter of days, IBM moved to strike the declaration demonstrating those facts – but now concedes that it would take only “weeks” to use CMVC to produce the requested information, and make no claim at all about the time it would take to use RCS to produce the information.

See Reply Compel Mem. at 6-13. SCO further shows in its opposition to IBM’s motion to strike that (among other things) in a case of this complexity and magnitude, a production that can be accomplished in a matter of weeks simply cannot, as a matter of law, constitute an “undue burden” sufficient to avoid production under Rule 26(b)(iii). See SCO’s Mem. in Opposition to IBM’s Motion to Strike the Declaration of Chris Sontag (Aug. 26, 2004) at 4-10.

IBM has also failed to produce early versions of AIX, which discovery is necessary to permit SCO to trace the progression of UNIX System V material through AIX and Dynix. See, e.g., Disc. Mem. at 4-14; Reply Mem. re Disc. at 7-20; Compel Mem. 4-8; Reply Compel Mem. at 10-13. IBM does not dispute that it has failed to provide the information. Without that information, SCO could not depose the AIX and Dynix programmers in a remotely complete way. SCO is plainly entitled to ask programmers questions about the code they have contributed to AIX and Dynix; for example, without the early versions of AIX, SCO cannot sensibly depose any programmer about the contributions he made to AIX – because SCO will not even have the contribution in hand.

IBM thus has literally precluded SCO from deposing AIX and Dynix programmers, by refusing even to identify those programmers; and has effectively precluded SCO from deposing those programmers (even if they had been identified), by refusing to produce the evidence of their contributions to AIX and Dynix, or even all of the relevant versions of those programs.

Material Contract Witnesses. In refusing to produce the information showing even the identities of the programmers as well as their contributions, IBM obviously is going to great lengths to prevent SCO from securing these basic depositions. IBM’s intransigence in these respects not only is remarkable on its face – sixibiblio months into a case about software development, SCO still cannot obtain such rudimentary information – but also is highly prejudicial in several ways. Apart from SCO’s obvious inability to effectively depose the programmers themselves absent the additional discovery, the long duration of IBM’s refusal to provide the foregoing information is directly proportional to the utility of that information with respect to SCO’s ability to take other, key contract depositions. IBM’s own motions highlight how that is true.

The bulk of IBM’s contracts summary judgment motion does not concern a pure legal reading of SCO’s license agreements, but rather addresses the extrinsic, factual evidence that IBM offers to support its interpretation of those agreements. IBM presents the declarations of several witnesses who testify that the agreements are quite narrow in scope (such that AT&T would have had more protection from the copying of UNIX if the company had not entered into the agreements at all). The only two witnesses who have been subjected to cross-examination on that issue, however, previously testified – when they were still employed by AT&T, when AT&T’s interests were still at stake, when AT&T was enforcing the agreements, and before their contact with IBM or its counsel – that the same agreements are quite broad in scope. In alluding to the reasons and justifications for the broad scope of the agreements, those witnesses testified to the importance of the programming process by which the licensees would be developing products modified and derived from UNIX. See Part II.A.4, above.

In preparing to take the depositions of the declarants on whom IBM relies, SCO is entitled first to take the depositions of the AIX and Dynix programmers, to show that the foregoing risks inherent in the programming process were also present in the programming processes at issue in this case. In other words, IBM improperly seeks to preclude SCO from cross-examining IBM’s summary judgment declarants with the very information that is the express basis of the contradictory sworn testimony of the only two declarants who were cross-examined regarding the scope of the license agreements. SCO’s ability to present contract deponents with such information concretely (for example, in the form of programmer testimony) is crucial under the circumstances – where as much as twenty years have passed since the agreements were drafted and enforced, but witnesses are now third parties who have neither the incentive nor wherewithal to review their prior testimony or contemporaneous documents bearing on the current testimony, and whom IBM has no incentive to provide with such information prior to their testimony. SCO’s capacity effectively to depose the foregoing contract witnesses will be a function of the extent to which SCO can concretely show and remind these witnesses of the types of risks that concerned AT&T and underlie the license agreements. At this point, SCO could not take any of the foregoing depositions without taking a substantial risk of having to re-open the deposition to ask further, highly relevant questions arising out of documents produced subsequent to the depositions.

There is therefore nothing to be gained, and much to be lost, in accelerating the adjudication of fact-intensive dispositive motions no less than six ahead of the fact-discovery cut-off and without even the basic discovery that IBM’s own motions show to be relevant. The depositions of the two declarants noted above, Otis Wilson and David Frasure, are cases in point. In March and April of this year, IBM produced approximately 670,000 pages of documents to SCO. IBM thereafter noticed the depositions of Messrs. Wilson and Frasure, but not of any of the other witnesses who have given declarations in support of IBM’s motions. SCO objected to the timing of the depositions, pointing out (among other things) that IBM had only recently made its large production of documents. See SCO’s Expedited Motion and Mem. for a Protective Order (June 3, 2004) & Reply Mem. in Support of Motion for Protective Order (June 5, 2004). Only after the depositions had been taken did SCO find that IBM’s production of documents included the deposition transcripts of Mr. Wilson’s and Mr. Frasure’s flatly contradictory sworn testimony excerpted above, and thereby understand why IBM had scheduled the depositions of those particular witnesses when it had. Although SCO reserved its right to re-open the depositions (and plainly is entitled to do so), obviously the more efficient way to have proceeded with the depositions would have been to permit SCO adequate time to receive and process the information relevant to those witnesses’ testimony.

C. IBM Has Failed to Produce Basic Discovery That Will Itself
Bear Directly on SCO’s Contract Claims and IBM’s Contracts Motion

The multiple categories of documents and information that SCO has long sought not only are necessary predicates to the depositions, but would also bear directly on SCO’s contract claims and, therefore, IBM’s contracts summary judgment motion.

AIX and Dynix Programmer Identities and Contributions. In deposing the AIX and Dynix programmers (whom IBM has yet to identify), SCO would:

  • take the depositions of the programmers that IBM claims produced the entirely “homegrown” code (which IBM tells the Court is all that it wants to protect);

  • show in those depositions that these programmers were able to, and did in fact, engage in non-literal copying, compounded many times over by repeated reliance on IBM and Sequent’s initial appropriations and subsequent versions based on them; and

  • show through these depositions that it would be difficult, not easy, for IBM or Sequent to demonstrate what was entirely “homegrown” (given that the programmers were tasked with using AT&T innovations to facilitate the delivery of IBM and Sequent products to market).

If the programmers were going to testify that their contributions did not reflect any copying from UNIX, IBM’s refusal to provide the requested information would be unnecessary.

Earlier Versions of AIX. SCO seeks to demonstrate that IBM’s particular contributions to Linux are modifications or derivatives of UNIX System V. SCO is attempting to do so by tracing the development of IBM’s particular Linux contributions from UNIX System V code through AIX or Dynix and into Linux. IBM has largely frustrated SCO’s efforts to obtain discovery to support that theory. IBM is well aware of SCO’s efforts. SCO has sought production expressly for the purpose of showing this progression. See p. 24 n.5, above. Indeed, in the same letter IBM cites for the proposition that SCO claims it need not trace any particularized development, SCO stated: “SCO, based on the information currently available, has attempted to identify the specific lines of code from UNIX System V from which IBM’s contributions from AIX and Dynix/ptx were derived.” Letter from B. Hatch to T. Shaughnessy (Apr. 19, 2004) at 2 (Exh. 33). But IBM has refused to provide particular versions of AIX and Dynix, omitting steps in the development chain which prevents SCO from tracking the progression of SCO’s proprietary material from version to version and finally into Linux.

CMVC and RCS Information. IBM also continues to refuse to produce other documents SCO has long sought that would bear directly on IBM’s interpretation of the license agreements. IBM continues to refuse to produce, for example, the AIX and Dynix revision information available on the CMVC and RCS systems, including programming notes, design documents, and white papers.

SCO explained in its July 12 memorandum regarding discovery that those materials will provide SCO with extensive information about IBM’s programmers and their involvement with AIX and Dynix. Those materials may contain admissions concerning the meaning of, and limitations imposed by, the license agreements; admissions regarding IBM’s liability for breaching those agreements; and admissions that the development of AIX and Dynix depended on UNIX System V. Even under IBM’s narrow theory of the contract, the materials are relevant because they would permit SCO to test the validity of IBM’s claim that at some point AIX and Dynix ceased to be modifications or derivative works “based upon” UNIX System V and were no longer subject to the restrictions of the license agreements. Even more basically, those documents would logically include programmers’ acknowledgements of the constraints they faced upon exposure to UNIX materials.

SCO has sought the foregoing materials since well before the date (May 28) that SCO submitted its opening memorandum regarding discovery to the Magistrate Judge. 25 SCO specifically sought the CMVC and RCS information as soon as it could do so – that is, upon IBM’s failure in late March of this year to produce any version of AIX. Only after SCO reviewed IBM’s limited production at that time was it able properly to demonstrate to the Magistrate Judge why SCO was then plainly entitled to receive the CMVC and RCS materials. Accordingly, to the extent that SCO continues to litigate to obtain those documents, necessary to permit SCO to depose the material witnesses regarding the contract issues in this case, SCO does so as a consequence of IBM’s delays and inadequate responses to discovery.

SCO reasonably expects, moreover, that the Magistrate Judge will order IBM to produce the foregoing CMVC and RCS materials. In addition to the relevance of those materials to SCO’s contract claims, the materials are directly relevant to IBM’s Ninth Counterclaim, in which IBM asks the Court to declare that “IBM does not infringe, induce the infringement of, or contribute to the infringement of any SCO copyright through the reproduction, improvement, and distribution of AIX and Dynix.” IBM’s Second Amended Counterclaims ¶ 167. In thus seeking a clean bill of health for the entire history of AIX and Dynix, IBM itself puts directly at issue the systems designed to store those histories and to permit others most efficiently to examine those histories.

IBM should not benefit from slowing the timing of its discovery in this way, while accelerating the timing of its dispositive contracts motion no less than six ahead of the discovery schedule. If IBM is to rely on the supposed absence of evidence that it has contributed to Linux code copied from UNIX, it should not be permitted to do so even as it holds back the discovery that would include such evidence.

CONCLUSION

For all of the above reasons, SCO respectfully requests that the Court grant its motion to enforce the Court’s Amended Scheduling Order and to defer consideration of IBM’s summary judgment motions until after the end of the Court’s fact-discovery period.

DATED this 8th day of September, 2004.

_______[signature]_____
HATCH, JAMES & DODGE, P.C.
Brent O. Hatch
Mark James

BOIES, SCHILLER & FLEXNER LLP
Robert Silver, Esq. (admitted pro hac vice)
Stephen N. Zack (admitted pro hac vice)
Mark J. Heise (admitted pro hac vice)

Attorneys for The SCO Group, Inc.


1 See also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (the district court may “deny summary judgment in a case where there is reason to believe that the better course would be to proceed to a full trial”); 6 James Wm. Moore et al., Moore’s Federal Practice § 56.15(6) (2d ed. 1989) (same).

2 The discovery hearing before the Magistrate Judge was scheduled for September 14, the day before this Court’s hearing on the pending motions relating to the Tenth Counterclaim, only because IBM rejected any of the several earlier dates that the Court had provided for that hearing.

3 SCO also has previously shown that expert testimony is necessary for the Court to consider and resolve the issues of “substantial similarity” underlying SCO’s copyright claim and IBM’s copyright defenses. See SCO’s July 9 Mem. at 63-65. Accordingly, the parties would have to brief for the Court, after fact discovery, the issues surrounding the parties’ expert testimony.

4 Because responding to IBM’s motions in full at this juncture would undermine the specific purpose of this motion, SCO does not purport herein to oppose IBM’s dispositive motions on the merits or on the basis of Fed. R. Civ. P. 56(f), and reserves the right to do so depending on the resolution of the instant motion.

5 In its July 12 Reply Memorandum re Discovery, SCO expressly delineated its two theories under two separate section titles. See Reply Mem. re Disc. at 11, 13. SCO explained that “One way for SCO to prove that IBM breached the License Agreements is for SCO to demonstrate that versions of AIX and/or Dynix/ptx are derivatives of System V within the meaning of the Agreements, and that IBM disclosed, exported, or published those derivatives.” Id. at 11 (emphasis added). But SCO sought production of discovery related to, among other things, the “particular” and “precise” contributions of Dynix programmers to Linux, expressly for the purpose of supporting its second theory of liability: “SCO will prevail on its breach of contract claims if it can demonstrate that IBM in fact disclosed protected ‘methods or concepts.’ The most efficient and straightforward way for SCO to discover if IBM made such disclosures is through access to Dynix/ptx programmers and their particular contributions.” Id. at 14 (emphasis added). SCO repeatedly clarified its goal of learning “the identity of Linux contributors” and “specifics about their own Linux contributions” in support of this second theory of contract claims. Id. (emphasis added).

6 SCO has sought production expressly for the purpose of showing this progression: “SCO, based on the information currently available, has attempted to identify the specific lines of code from UNIX System V from which IBM’s contributions from AIX and Dynix/ptx were derived.” Letter from B. Hatch to T. Shaughnessy dated Apr. 19, 2004, at 2 (Exh. 33).

7 For more than a year, IBM has refused to provide SCO with the discovery necessary to trace the progression of UNIX System V material through AIX or Dynix into IBM’s particular Linux contributions. IBM has refused to provide particular versions of AIX and Dynix, omitting steps along the development chain which prevents SCO from tracking the progression of SCO’s proprietary material from version to version and finally into Linux. SCO has previously raised these very issues: “To trace the foundations of AIX source code, and to have a complete understanding of Dynix’s source code origins, SCO must have access to all interim and final versions of AIX, Dynix and ptx; to programmer notes and design documents that reveal the work behind the revisions to the programs; and most importantly, to all revision control systems that track changes to AIX and Dynix, thus exposing the sources of IBM’s current AIX and Dynix code an revealing what portions of UNIX System V made their from AIX and Dynix into Linux.” SCO Mem. Regarding Discovery, dated May 28, 2004, at 6. IBM has also refused to provide SCO with each programmer’s particularized contributions to AIX and Dynix, preventing SCO from deposing the very programmers who could identify, as the writers of AIX and Dynix, what role UNIX System V played in the development of each portion of AIX and Dynix source code.

8 See, e.g., Gates Rubber Co. v. Bando Chem. Indus., Ltd., 9 F.3d 823, 844 (10th Cir. 1993) (setting forth the test for “substantially similarity” with respect to computer programs); SAS Institute, Inc. v. S&H Computer Sys., Inc., 605 F. Supp. 816, 830 (M.D. Tenn. 1985) (finding copyright violation on the basis of substantial similarity of program’s “organization and structural details,” and specifically rejecting the proposition that such similarity could only be demonstrated in “specific lines of code”); Whelan Assocs., Inc. v. Jaslow Dental Labs, Inc., 609 F. Supp. 1307, 1321 (E.D. Pa. 1985) (noting the substantial similarity of two programs in holding that “direct evidence of copying is not required”); Atari, Inc. v. N. Am. Philips Consumer Elecs. Corp., 672 F.2d 607 (7th Cir. 1982) (“When the alleged infringing work is not a duplicate of the copyrighted work, a determination of whether protected elements have been taken requires a close analysis of the differences and similarities between the two works.” (citing E. Kitch & H. Perlman, Legal Regulation Of The Competitive Process 665 (2d ed. 1979))); see also Warner Bros. Inc. v. Am. Broadcasting Prods., 654 F.2d 204 (2d. Cir. 1981) (“it is well settled that copying may be inferred where a plaintiff establishes that the defendant had access to the copyrighted work and that the two works are substantially similar.”); Sobhani v. Radical.Media, Inc., 257 F. Supp. 2d 1234, 1238 (9th Cir. 2003) (holding that defendant’s commercials, similar to plaintiff’s commercials, were unlawful derivative work).

9 SCO sets forth additional examples of such prior testimony given by IBM’s declarants (which is flatly inconsistent with their more recent declarations) in Part II.A.4, below.

10 Indeed, SCO intends to file, at the appropriate time, a motion for summary judgment on its contract claims, in which SCO will show that the plain, unambiguous meaning of the license agreements in this case support SCO’s position. Of course, the goal of efficient case management would best be served by consideration of all summary judgment motions concerning the contract interpretation issues in this case at the same time, following the close of fact discovery.

11 Section 1.04 of the license agreements defines “SOFTWARE PRODUCT” as follows: “materials such as COMPUTER PROGRAMS, information used or interpreted by COMPUTER PROGRAMS and documentation relating to the use of COMPUTER PROGRAMS.” The Section also refers to the Schedule accompanying each license agreement for a listing of the “Materials available from AT&T for a specific SOFTWARE PRODUCT.”

12 The license agreements contain a New York choice-of-law provision. See Exh. 13 § 7.13, Exh. 14 § 7.13

13 This language was included in the original IBM and Sequent license agreements, as well as in the IBM Side Letter.

14 This plain language reading of the IBM side letter is only reinforced by AT&T’s subscription newsletter, $ echo, on which IBM erroneously attempts to rely for its misguided argument. See IBM Contract Mem. at 63. The April and August 1985 editions of that newsletter simply announced – as the sections quoted by IBM make clear – that AT&T would be revising its standard agreement to address the ownership of modifications and derivative works prepared by licensees. See Exhs. 10, 11, as with the IBM Side Letter Agreement, the newsletter never suggested in any way that the clear and explicit use and disclosure restrictions in the license agreements would be diminished or eliminated.

15 The IBM Side Letter Agreement amended Section 7.06(a) of the IBM software license agreement to read, in relevant part, as follows:

“LICENSEE agrees that it shall hold SOFTWARE PRODUCTS subject to this Agreement in confidence for AT&T. LICENSEE further agrees that it shall not make any disclosure of such SOFTWARE PRODUCTS to anyone, except to employees of LICENSEE to whom such disclosure is necessary to the use for which rights are granted hereunder. LICENSEE shall appropriately notify each employee to whom any such disclosure is made that such disclosure is made in confidence and shall be kept in confidence by such employee. Nothing in this agreement shall prevent LICENSEE from developing or marketing products or services employing ideas, concepts, know-how or techniques relating to data processing embodied in SOFTWARE PRODUCTS subject to this Agreement, provided that LICENSEE shall not copy any code from such SOFTWARE PRODUCTS into any such product or in connection with any such service and employees of LICENSEE shall not refer to the physical documents and materials comprising SOFTWARE PRODUCTS subject to this Agreement when they are developing any such products or services or providing any such service.” Exh. 12 at 4 (emphasis added).

16 To support its claim that its interpretation of the IBM Side Letter should also impact on the Sequent agreement, IBM even goes so far as to rely on contract language that was not included in either of the IBM or Sequent agreements. See IBM Contract Mem. at 54 (citing Exh. 39, a license agreement between AT&T and The Santa Cruz Operation).

17Accord State v. Home Indem., 66 N.Y.2d 669, 671 (1995) (the trier of fact, not the court on summary judgment, must resolve ambiguity in contract); Wells v. Shearson Lehman, 72 N.Y.2d 11, 27 (1988) (the court’s determination that the contract is ambiguous “necessitates extrinsic evidence” and operates to “bar summary judgment”); Aubuchon Realty v. Fid. Nat’l Title Ins., 743 N.Y.S.2d 626, 628 (App. Div. 2002) (court cannot interpret contract as a matter of law if “there is ambiguity in the terminology used in the instrument and resolution of that ambiguity depends upon extrinsic evidence”) (emphasis in original)); Ruttenberg v. Data Sys., 626 N.Y.S.2d 174, 175 (App. Div. 1995) (where the court determines the contract to be “ambiguous and the intent of the parties becomes a matter of inquiry, a question of fact is presented which cannot be resolved on a motion for summary judgment”); Chem. Bank v. Flushing Sav. Bank, 536 N.Y.S.2d 442, 446 (App. Div. 1989) (emphasizing that where “the intent of the parties to a contract is not clear from the language of the contract itself must be determined by disputed evidence or inferences outside of the written agreement, we have not hesitated to deny or to reverse a grant of summary judgment”).

18 The other cases IBM cites in support of its proposition that a court can find summary judgment when extrinsic evidence is exceedingly one-sided are out-of-jurisdiction cases that fail to address the critical shortcomings of the summary judgment motion at issue in this case – filed on the basis of a wholly incomplete record, before the close of discovery, and in reliance on untested affiant declarations. See p.33, below. In Compagnie Financiere de CIC et de L’Union Europenne v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 232 F.3d 153, 161 (2d Cir. 2000), as in Moncrief (discussed above), the court’s decision rested on the case’s unique procedural posture; the Second Circuit emphasized that because the summary judgment motion at issue “followed a bench trial, the trial record was before it.” The Court also observed that neither party had suggested the existence of any additional evidence not already submitted at trial: “The parties confirmed at oral argument that the record was complete with regard to extrinsic evidence supporting their interpretations.” Id. (emphasis added); see also, e.g., Farmland Indus. v. Grain Bd. of Iraq, 904 F.2d 732, 736 (D.C. Cir. 1990) (motion for summary judgment was filed more than six weeks after the close of discovery).

19 In addition, IBM’s reliance on the doctrine of contra proferentem is misplaced. Contra proferentem “is applied only in cases where there is an ambiguity in some terminology of the policy [contract] which cannot be resolved by the presentation of extrinsic evidence.” Alfin, Inc. v. Pac. Ins. Co., 735 F. Supp. 115, 121 n.5 (S.D.N.Y. 1990). Accordingly, courts have often rejected the application of the doctrine in the summary judgment context. See Schering Corp. v. Home Ins. Co., 712 F.2d 4, 9-10, (2d Cir. 1983) (refusing to apply contra proferentem because “the party opposing summary judgment propound[ed] a reasonable conflicting interpretation of a material disputed fact”); Liszt v. Karen Kane, Inc., No. Civ.A.3:97-CV-3200-L, 2001 WL 739076, at *10 (N.D. Tex. Jun. 26, 2001) (Exh. A) (“The interpretive rule of contra proferentem therefore runs into a conflicting, and stronger, rule in this context – that the existence of a fact question as to an ambiguous contract precludes summary judgment.”); Commonwealth Ins. Comp. v. Stone Container Corp., No. 99 C 8471, 2003 WL 260713, at *2 (N.D. Ill. Jan. 31, 2003) (Exh. C) (“We will not apply the rule of contra proferentem on summary judgment when there are substantial questions of fact as to the intent” of the parties). Moreover, several cases suggest that the doctrine of contra proferentem may be completely inapplicable to the contracting circumstances of this case, which indisputably involved arms-length deals between sophisticated and well-represented parties. See 67 Wall Street Co. v. Franklin Nat’l Bank, 37 N.Y.2d 245, 249 (1975) (holding that contra proferentem benefits parties “who had no voice in the selection of [the agreement’s] language”) (emphasis added); Hertzog, Calamari & Gleason v. Prudential Ins. Co. of Am., 933 F. Supp. 254, 258-259 (S.D.N.Y. 1996) (noting that “the parties were in parity with each other” and thus “the contra proferentem maxim has no proper office to perform.”); Eley v. Boeing Comp., 945 F.2d 276, 280 (9th Cir.1991) (“Although contra proferentem is strictly applied in the interpretation of insurance contracts, it is not automatically or universally applied to other contracts, especially those that result from arms-length bargaining by parties of equal power.”)

20 AT&T’s UNIX licensing agreements employed substantially similar terminology designed to protect the same rights and privileges vis-a-vis AT&T’s various licensees. See Pfeffer Decl. at 2 (Exh. 27) (“Although not every single such license agreement was identical, they generally contained substantially similar terms and reflected the same intent, especially insofar as those agreements concerned protections for the licensor’s intellectual property and other proprietary rights in UNIX.” (emphasis added)). IBM’s own witnesses concede as much. See, e.g., Wilson Dep. at 259 (Exh. 15) (“The terms and conditions were pretty much set in a boilerplate, and any negotiation was usually just clarification to determine which software product someone needed. So there wasn’t a specific negotiation with individual licensees that would be any different than the boilerplate standard agreement.” (emphasis added)). Accordingly, the witnesses’ testimony and writings concerning substantively similar (and often identical) language in other UNIX licensing agreements is indisputably relevant to the interpretation of the particular licensing agreements at issue here.

21 Mr. Frasure’s counsel, James G. Szymanski, has served in several in-house legal capacities for IBM, and has represented IBM in numerous notable cases. See Exh. 17. Aside from Messrs. Wilson and Frasure, IBM’s counsel have entered into attorney/client relationships with several former employees of AT&T and USL – companies that are SCO’s predecessors in interest to the UNIX code and business – thereby precluding SCO from even talking to these individuals (who are, in effect, its former employees) about the very issues that IBM claims are not disputed.

22The license agreement at issue in the BSD case had defined “LICENSED SOFTWARE” consistently with the definition of that term in the IBM and Sequent agreements – in relevant part, as “all or any portion of the computer programs, other information and documentation prepared by LICENSEE as a modification or derivative work based on any of the materials so listed or furnished” in the schedule attached to the agreement. Exh. 20 (Educational Agreement dated July 1, 1983, at 1).

23 See, e.g., Gilbert Frank Corp. v. Fed. Ins. Co., 70 N.Y.2d 966, 968 (1988) (holding that party seeking to establish waiver must demonstrate a “clear manifestation of [the other party’s] intent” to waive contractual rights); Civil Serv. Employees Ass’n v. Newman, 450 N.Y.S.2d 901, 903 (App. Div. 1983) (“a waiver must be clear, unmistakable, and without ambiguity”).

24SCO has explained: “To trace the foundations of AIX source code, and to have a complete understanding of Dynix’s source code origins, SCO must have access to all interim and final versions of AIX, Dynix and ptx; to programmer notes and design documents that reveal the work behind the revisions to the programs; and most importantly, to all revision control systems that track changes to AIX and Dynix, thus exposing the sources of IBM’s current AIX and Dynix code and revealing what portions of UNIX System V made their from AIX and Dynix into Linux.” Disc. Mem. at 6.

25 In its First Request for Production of Documents (June 24, 2003), SCO sought “All documents that identify any person at IBM and Sequent who had access to AIX source code” to “Sequent Dynix source code.” Exh. 32. In its Second Request for Production of Documents (Dec. 4, 2003), SCO sought “All source code for AIX and Dynix since 1985 including all instructions, information used and all documentation relating to the use of AIX and Dynix, including but not limited to, all development notes.” Exh. 33.


  


SCO's Memo in Support of its Expedited Motion to Enforce the Scheduling Order - text - Updated | 367 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections here
Authored by: MathFox on Monday, September 13 2004 @ 06:38 PM EDT
Actually this isn't the motion itself it is the "MEMORANDUM IN SUPPORT OF SCO'S EXPEDITED MOTION TO ENFORCE THE COURT S AMENDED SCHEDULING ORDER DATED JUNE 10, 2004"

As far as I know, this overlength memorandum has not been admitted by the court yet.

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When people start to comment on the form of the message, it is a sign that they have problems to accept the truth of the message.

[ Reply to This | # ]

Off Topic, Trolls here please
Authored by: Ossymoon on Monday, September 13 2004 @ 06:40 PM EDT
Thank you!!!



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He's a technomage... He appears when you want him least, and need him most.

[ Reply to This | # ]

SCO's Motion to Enforce the Scheduling Order - text
Authored by: Anonymous on Monday, September 13 2004 @ 06:42 PM EDT
Maureen O'Gara just filed here. Title: "SCO Tries To Squeeze Discovery Out of IBM"

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List of the exhibits to this memorandum here
Authored by: Newsome on Monday, September 13 2004 @ 06:44 PM EDT
Help everyone out by listing what the exhibits are here!

Thanks,

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Frank Sorenson

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Who is the new guy?
Authored by: Anonymous on Monday, September 13 2004 @ 06:46 PM EDT
*This* could never have been written by the lawyers who wrote all the stuff
before this one!

I think that some new guy has given a silver touch to SCO's filings at this
court.

The clock is ticking... and they (as always) want delays!

Is this when, as things are getting down to the last seconds of the last quarter
of play, where you give the ball to your best and there goes the shot?

Ummm, maybe Darls brother wrote this one? I don't think so!
Who ever wrote this one actually looks like he might have passed law school and
with honors (vs a free pass)!

[ Reply to This | # ]

Not unexpected, considering the upcoming hearings...
Authored by: John M. Horn on Monday, September 13 2004 @ 06:46 PM EDT
Something like this motion comes as no surprise to anyone I'm sure. SCO is
desperate for some kind of win, no matter how trivial - even another delay is a
win for them as it gives them more time to salvage and/or profit from their pump
and dump scheme.

It looks like someone is trying to boost the stock price today, it rose up to
$4.10 briefly before subsiding again in spite of the unusually intense trading.
I'm thinking that they are having difficulty keeping the stock price
artificially inflated at a level at or above $4.00. After the next few hearings,
they may have trouble keeping it above $2.00 per share...

John Horn

[ Reply to This | # ]

Selective quoting and misinterpretation of witnesses prior testimony
Authored by: beast on Monday, September 13 2004 @ 06:48 PM EDT
Starting at about page 44.

This quoted testimony is NOT about IBM using its own code in non-UNIX products,
but rather about using UNIX code in IBM products.


---
Delay is the deadliest form of denial. - J. Northcote Parkinson

[ Reply to This | # ]

SCO's ways of sealing a document.
Authored by: MathFox on Monday, September 13 2004 @ 06:53 PM EDT
According to the Utah court docket (entry 0-0 between 276-1 and 277-1)
Docket Text: Proposed document from SCO Grp entitled : Sealed Memorandum in Support of Expedited Motion to Enforce
this memorandum should be sealed. On the other hand, the full document is available as http:/ /www.sco.com/ibmlawsuit/20040908_Enforce%20Sched%20Order.pdf at the SCO website. Someone must have made a mistake here; let's hope for SCO that the "Sealed" on the docket is a clerical error.

---
When people start to comment on the form of the message, it is a sign that they have problems to accept the truth of the message.

[ Reply to This | # ]

This motion is almost unreadable
Authored by: Philip Stephens on Monday, September 13 2004 @ 06:58 PM EDT
Some new lawyer(s) must have been responsible for this motion, because the
language employed is very difficult to follow. This is not the kind of clear
language found in IBM's motions and memoranda...let alone the kind of language
found in SCO's previous motions and memoranda.

I only got through the first few paragraphs before writing this comment--I have
a feeling this motion is going to be a long, hard slog through very obtuse
language...

[ Reply to This | # ]

Presuming much, aren't they?
Authored by: rand on Monday, September 13 2004 @ 07:01 PM EDT
...SCO was not able to demonstrate its need for this additional discovery pursuant to the Magistrate Judge’s procedure until this summer. SCO will now not receive this discovery until sometime this fall.
They're already assuming they are going to get all the discovery (ie, every byte of AIX/Dynix) they've been pressing for.

The terms "tantrum" and "kicking and screaming" and "flying fit" all come to mind here, no matter how eloquent this long-winded diatribe appears. I've had to break up adolescents screaming at each other about who said what to who and why and did-not and did-so, and it really does sound a lot like this.

---
Eat a toad for breakfast -- it makes the rest of the day seem so much easier (Chinese (I'm told) proverb) (IANAL and so forth and so on)

[ Reply to This | # ]

Depositions from the USL vs. BDSI case?
Authored by: Philip Stephens on Monday, September 13 2004 @ 07:12 PM EDT
Am I seeing things? SCO are attempting to use depositions of Mr. Wilson and Mr.
Frasure during the (supposedly sealed) USL vs. BSDI case, in which they
apparently contradict what they've now said in depositions taken by IBM
regarding the AT&T contract with IBM?

Putting aside the question as to whether the depositions themselves were sealed
(does anyone know?), isn't SCO aware of the fact that USL was going to LOSE the
case, and decided to settle instead--meaning those depositions are hardly an
indicator of truth regarding the contracts.

If it's true that Wilson and Frasure claimed the AT&T contract covered code
written and copyrighted by licensees (as SCO so desperately wants us to
believe), but have said the opposite in the depositions performed by IBM a few
months ago--then what does this tell us? Obviously, they had to be lying during
one of the depositions, and SCO wants us to believe that they're lying in the
IBM depositions. But if you ask me, it's more likely they were lying in the
1992 depositions, given that USL was attempting to lay claim to code written by
the University of Berkley for BSD Unix.

Or is SCO blowing a whole bunch of smoke towards a whole bunch of mirrors,
trying to mischaracterise what Wilson and Frasure were saying in their 1992
depositions, in order to create a bogus "dispute of the facts"?

I guess I'm going to have to read this motion more closely, but it's damn hard,
because it's such a hard read to begin with.

[ Reply to This | # ]

SCO's Motion to Enforce the Scheduling Order - text
Authored by: r_faith on Monday, September 13 2004 @ 07:16 PM EDT
it's methods and concepts again. methods and concepts on every page.

[ Reply to This | # ]

SCO's Motion to Enforce the Scheduling Order - text
Authored by: Anonymous on Monday, September 13 2004 @ 07:33 PM EDT
IBM inaccurately asserts that those claims “rest entirely on the proposition that ‘[t]he AIX work as a whole and the Dynix/ptx work as a whole are modifications of, or are derived from [UNIX] System V.’” IBM Contract Mem. ¶ 62. That is false. SCO does maintain that AIX and Dynix are subject to the restrictions of the licensing agreements because they are derivatives of UNIX, and consequently that IBM breached the license agreements by contributing to Linux any portion of those contractually-protected derivatives.

So, SCO doesn't hold that AIX and Dynix are derived from Unix, but they do hold that AIX and Dynix are subject to the agreement because they're derivatives of Unix?!

Is it me, or is there a contradiction there?

[ Reply to This | # ]

The Con
Authored by: maco on Monday, September 13 2004 @ 07:40 PM EDT
The major cons I spot in this document:
  • SCOX is trying to redirect the issue as IBM versus The Court (not IBM vs a Weak Case). With Anybody versus The Court, guess who wins 95% of the time.
  • SCOX's reading of the contract, which appears to mean what they say until you know what it was trying to say, at which point their reading makes no sense at all.
  • The "fact" that the PSJ would, in the end, have no effect on discovery. This is obviously false, since, once the contract and amendments are read correctly, SCOX has no basis for its every-iteration-known-to-man discovery.
  • The shell game the way they slide between what IBM has not provided as mandated by the court and as asked for by them.
Would provide more, but this is all my stomach can take. It's a beautiful day, etc etc

[ Reply to This | # ]

What has (most of this) to do with the scheduling order
Authored by: Anonymous on Monday, September 13 2004 @ 07:47 PM EDT
This document is a hard slog.

I started reading it properly and throughly. It raised a sweat, not because its
arguments and good, but because it's incredibly hard work to read. I then
scanned ahead most of the rest. I will try to read it all in detail again....
when I get my breath back.

Anyway, this documents covers all kinds of things, including (among other
things):

1. Merits of IBM CC10 (IBM's Linux activities do not infringe any SCO
copyright)

2. Merits of IBM CC8 (SCO's distribution of Linux in violation of an IBM
copyright)

3. Merits of SCO contract claims (SCO 1 to 4)

4. Discovery issues

5. etc etc


It seems to me the vast majority of this motion has very little to do with the
schedule, but is just further briefing on items 1 to 4. SCO haven't yet even
replied on 2 and 3, so why do this.

In ruling on the "schedule", all these merits and discovery battles,
are not at issue, at least only in a tangent way.

What is wrong with these people?


Quatermass
IANAL IMHO etc

P.S.
BTW did the guy/gal writing this, read it thru *at all* ?

[ Reply to This | # ]

SCO's Motion to Enforce the Scheduling Order - text
Authored by: Jude on Monday, September 13 2004 @ 07:54 PM EDT
IBM has now filed three fact-intensive dispositive motions...

...in stark contrast with SCO's own motions.

[ Reply to This | # ]

It appears SCO misnamed this document
Authored by: Dastardly on Monday, September 13 2004 @ 08:10 PM EDT
My reading is that this is actually a Respose to IBMs Memorandum in Support of
XXXXXXXXX. NOT SCO's Memorandum in Support of the Scheduling Order.

They spend pages on IBM's affidavit's for the PSJ on breach of contract,
Novell's waiver, and IBM's interpretation of the plain language of the contract.
Isn't that supposed to be ina different document.

IANAL. But, shouldn't this memorandum concentrate on case law that supports
delaying IBM's PSJ requests, and how the current case is similar to the
referenced case.

My theory is that SCO is using this motion as a chance to try some arguments
before the PSJ hearings to see if they stick. Especially, bringing in the USL
depositions. Can the judge deny the request to submit an overlength memorandum
given the irrelevancy of much of this memorandum?

[ Reply to This | # ]

Still distributing Linux
Authored by: reuben on Monday, September 13 2004 @ 08:27 PM EDT
"Moreover, IBM relies for its motion on an inaccurate presentation of the facts; for example, contrary to IBM’s claims, SCO did not make Linux available to the general public on its website after it filed this suit. In accordance with its preexisting contractual obligations to its customers, to whom SCO owed continued upgrades, maintenance, and service, SCO made certain Linux products available on its website to its customers only and on a non-public (and later password-protected) basis. Once SCO learned that non-customers had been able to access the products despite the password protection, it promptly removed all Linux products from its website."

Are they trying to slide this one by based on the difference between a web site and an FTP site? I can confirm that SCO is still distributing Linux right now on its FTP site, along with a message from Caldera affirming that it is "freely distributed." It's not anywhere obvious, but if I know where it is, then SCO certianly "knew or should have known" about it too. Even ignoring the ongoing distribution today, the statement that "SCO did not make Linux available to the general public on its website after it filed this suit" is a lie, because the removals didn't even begin until very long after the suit was filed. I noticed that there is no reference to any deposition, document, or evidence in general for these statements, just an assertion. I wonder if they will put together something more formal when responding to IBM's motion for PSJ on contract.

A good rule of thumb is: if they're lying about the things I can check, they're probably lying about the other things too.

[ Reply to This | # ]

Pot. Kettle. You know the drill...
Authored by: Anonymous on Monday, September 13 2004 @ 08:28 PM EDT
SCOwrote this about IBM:
letting their claimed rights depend on linguistic contortions and extrinsic evidence
Pot meet kettle...

(not that I believe in what SCOwrote...)

[ Reply to This | # ]

Property, Intellectual Property, and Free Riding
Authored by: Anonymous on Monday, September 13 2004 @ 08:29 PM EDT
As an economist and a computer scientist, I found this to be an amazing paper:

Property, Intellectual Property, and Free Riding
MARK A. LEMLEY
Stanford University - School of Law

August 2004

Stanford Law and Economics Olin Working Paper No. 291

Abstract:     
Courts and scholars have increasingly assumed that intellectual property is a form of property, and have applied the economic insights of Harold Demsetz and other property theorists to condemn the use of intellectual property by others as free riding. In this article, I argue that this represents a fundamental misapplication of the economic theory of property. The economics of property is concerned with internalizing negative externalities - harms that one person's use of land does to another's interest to it, as in the familiar tragedy of the commons. But the externalities in intellectual property are positive, not negative, and property theory offers little or no justification for internalizing positive externalities. Indeed, doing so is at odds with the logic and functioning of the market. From this core insight, I proceed to explain why free riding is desirable in intellectual property cases except in limited circumstances where curbing it is necessary to encourage creativity. I explain why economic theory demonstrates that too much protection is just as bad as not enough protection, and therefore why intellectual property law must search for balance, not free riders. Finally, I consider whether we would be better served by another metaphor than the misused notion of intellectual property as a form of tangible property.

[ Reply to This | # ]

Is SCO off their rocker?
Authored by: Jude on Monday, September 13 2004 @ 08:30 PM EDT
The seventh paragraph in the section

B. IBM’s “Waiver” Arguments Are Patently Meritless

begins with the following:

SCO and Novell subsequently affirmed this understanding – in language that IBM’s motion overlooks entirely – through the October 1996 Amendment 2 to the Asset Purchase Agreement. Exh. 29. In addition to acknowledging that the APA had transferred to SCO “the copyrights and trademarks owned by Novell as of the date of the Agreement required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies,”

Has SCO forgotton that they're talking to the same judge that ruled on the doubtful
nature of this language? They also present a portion of the amendment in quotes,
but it is not an exact quote, it's SCO's interpretation.

[ Reply to This | # ]

Mental Contamination
Authored by: Anonymous on Monday, September 13 2004 @ 08:33 PM EDT
"Given that USL twice attempted to include a provision that any derivative work "based on" the licensed software would have to be treated as licensed software (in the 1983 System V Agreement and the 198S E-SOFT-00089 Agreement) and both times the University insisted that the language be narrowed to cover only derivative works that "contain" licensed software -- the argument that the intent was to cover any work "based on" the licensed software, or any work benefiting from knowledge of the licensed software, is completely unsupportable, much less the argument that anyone who has ever seen UNIX source code is "mentally contaminated" and may never write another piece of code that is not subject to USL's license."
Link

[ Reply to This | # ]

This motion is irrelevant to Wednesday's hearing
Authored by: beast on Monday, September 13 2004 @ 08:48 PM EDT
The bus ride home from work gave me a good opportunity to think about this
memorandum. :^)

It still remains that the only test of copyright infringement is if there is
infringing code after the abstraction/filtration/comparison test. The only
right that TSG can claim has been violated is a contractual one under the
ATT/IBM agreement. Such contractual rights are, once again, not at issue in
IBM's motion and TSG can't make a copyright infringement out of them.

---
Delay is the deadliest form of denial. - J. Northcote Parkinson

[ Reply to This | # ]

SCO's Motion to Enforce the Scheduling Order - text
Authored by: nattt on Monday, September 13 2004 @ 08:51 PM EDT
“Such right to use includes the right to modify such SOFTWARE PRODUCT
and to prepare derivative works based on such SOFTWARE PRODUCT,
provided the resulting materials are treated hereunder as part of the original
SOFTWARE PRODUCT.” (Emphasis added).

OK - it really hinges on the reading of this, doesn't it?? But SCO is trying to

interperet that if you take a piece of code that has never been near a Unix,
and add it to a Unix, it automatically becomes contaminated back to it's
original source by the Unix licence agreement. Even though the code never
previously saw unix, or was anywhere near a unix, and even though it has
been into other code wholy owned by IBM, as soon as it hits a Unix it's dead
as far as IBM's rights to it are concerned. This ridiculous interpretation by
SCO flaunts not only common sense, but copyright law and just plain
ownership of IBM of what obviously belongs, and will always belong to IBM.

SCO can twist and distort all they want, but the words are plain to those who
can read, and although (Unix+newcode) falls under the ATT licence, newcode
on it's own does not. It does not magically become back contaminated, right
back to it's source, and IBM are free under all normal interpretations and law
to do so with their own property as they please.

[ Reply to This | # ]

You Own It, We Control It
Authored by: Anonymous on Monday, September 13 2004 @ 08:52 PM EDT
That is SCO's theory on derivative works. That even though AT&T clearly
laid out that licensees owned derivative works which did not include AT&T
source code, they didn't give up their right to protect disclosure of such
derivatives.

Wow, that is a stretch, even for SCO.

(See pp. 32-34)

The mind boggles.

---
In matters of style, swim with the current, in matters of principle, stand like
a rock.
--Thomas Jefferson

[ Reply to This | # ]

Is this abnormal?
Authored by: Lord Bitman on Monday, September 13 2004 @ 09:06 PM EDT
Is it abnormal to say "please don't make a judgment until the end of
discovery"? Sounds reasonable to me. I'd think it would be odd to make a
judgment /before/ the end of discovery (if some side says they haven’t
found all they need)

Please interpret the above as an actual question, as in, a request for
information. (whenever I post a question, the question-ness of it seems lost on
most people..)


---
-- 'The' Lord and Master Bitman On High, Master Of All

[ Reply to This | # ]

I bet it works.
Authored by: Anonymous on Monday, September 13 2004 @ 09:20 PM EDT
Always does.

No, scox won't get the hearing delayed until February, not this time. Instead
scox will get a delay until November, maybe December. Scox usually gets about
half of what asks for.

Maybe the judge will again complement scox on their "good faith
effort." Before giving scox more delay, and more discovery.

Of course most posters here will insist that the judge is just giving scox more
rope to hang themselves. And the judge is making sure scox won't have grounds to
appeal.

[ Reply to This | # ]

SCO's newest wierd-science legal theory
Authored by: rand on Monday, September 13 2004 @ 09:22 PM EDT
“...it is not the intent of this section to claim rights or contest your rights to work written entirely by you; rather, the intent is to exercise the right to control the distribution of derivative or collective works based on the Program [in LGPL, ‘Library’]" Id. (emphasis added).

The GPL and LGPL thus clearly provide that while collecting “license fees” for Linux as a whole is not permitted, collecting other fees and specifically protecting one’s rights in one’s own intellectual property is.

Huh? Let me get this straight. You can't charge a license fee for ALL of Linux, but you CAN charge a license fee for PART of it? My head is swimming trying to envision distributing ALL of Linux to someone without a license while simultaneously only distributing PART of it to the same person WITH a license.

---
Eat a toad for breakfast -- it makes the rest of the day seem so much easier (Chinese (I'm told) proverb) (IANAL and so forth and so on)

[ Reply to This | # ]

SCO's Motion to Enforce the Scheduling Order - text
Authored by: tredman on Monday, September 13 2004 @ 09:23 PM EDT
I have to admit, I read through about the first dozen paragraphs before I gave
up. It's really amazing how different the IBM and SCOX documents are. It's
like night and day.

So I decided that, instead of trying to read the legalese of the whole document,
I'd skim through it and maybe catch some comments to try and explain things. So
I skimmed...

...and skimmed...

...and skimmed...

...and skimmed. Dear God, this was incredibly long-winded!

It was mind boggling how much they rattle on about things that really have
little directly to do with what they're trying to move for. Then I thought
about the biography of Judge Kimball that I read, especially the part where he
and his clerks discuss what he expects in his court, and particularly what he
prefers. One of those is brevity.

This document was, in the words of Tommy Lee Jones, "an example of go home
and do it again" - I think you know what I mean, Mr. Boies.

It's almost like they know what pushes the Judge's buttons, and they're doing it
anyway, just for the sake of it.

I'm actually going to sit down and try to read this on Saturday, during a quiet
afternoon, when the kids are out playing.

Tim

[ Reply to This | # ]

SCO's Motion to Enforce the Scheduling Order - text
Authored by: nattt on Monday, September 13 2004 @ 09:25 PM EDT
A: My interpretation of this is if – if you were developing software
modifications without the benefit of the licensed software, then you could
distribute those, but if you developed them with the benefit of the licensed
software that you could not distribute them to anyone in this case if you
mean anyone who is a non-licensee.” Frasure Dep. (12/8/92) at 42 (Exh. 9)

Now my understanding is that the code that we think is in question here was
indeed devloped by IBM without the benefit of UNIX, and hence can be
distributed. "Without the benefit of" is a very broad term of phrase,
but could
very well be taken to mean without the benefit of being a direct modification
of UNIX. Take that any other way and anyone who developed any software
that uses Unix as an operating system would be recieving benefit of Unix, and
hence not distributable to anyone who is a non-licensee.

In interpreting a contract, if a broad interpretation of a phrase leads to non-
sense, then must the term be interpreted as narrower?? How does this apply
in testimony - I guess you ask the witness to clarify, which IBM have done,
and the witness clarifies along the lines agreeing with both common sense
and IBM.

[ Reply to This | # ]

Amendment 2 of the APA
Authored by: rand on Monday, September 13 2004 @ 09:40 PM EDT
Forgive my ignorance, if it is such, but I can't seem to find Amendment 2 listed
as an exhibit anywhere in this case so far. Does anyone know if SCOG has
actually introduced it yet? I'm assuming that IBM was supplied a copy during
discovery, but that's not certain, either, since they've never referenced it
when referencing the APA itself.

---
Eat a toad for breakfast -- it makes the rest of the day seem so much easier
(Chinese (I'm told) proverb) (IANAL and so forth and so on)

[ Reply to This | # ]

What is this thing?
Authored by: rsteinmetz70112 on Monday, September 13 2004 @ 09:41 PM EDT
This purports to be a motion to enforce a scheduling order but reads like more
briefing on the PSJ motions and discovery. The PSJ is not in from of Judge Wells
but the scheduling order is hers ( I think)so who is this addressed to?

The only point, which has noting to do with the scheduling order, is that the
ATT declarants may have made some contradictory statements a long time ago, and
there is the affidavit of a former ATT attorney who disagrees with his former
colleagues, so SCOG should be allowed to at least depose them before that
motion is heard.

What does any of this have to do with the scheduling order?

Can a Judge throw out motions not on point?

Since Judge Wells has limited briefing before her hearing is this somehow going
to get someone into trouble or is this what caused her order, all of this off
topic extrainous material all on the same subject(s)

---
Rsteinmetz

"I could be wrong now, but I don't think so."

[ Reply to This | # ]

SCO's Motion to Enforce the Scheduling Order - text
Authored by: Hygrocybe on Monday, September 13 2004 @ 09:43 PM EDT
If I were the judge (and thank goodness I am not - the thought of wading through
this 'pile' gives me the horrors), I'd be telling them to take this obtuse and
obfuscated piece of "legalese jargon" away and place it firmly in the
rubbish tin; then resubmit the problem in simple, logical, short and precise
language that can be understood readily by anyone.

This whole document looks horribly like an attempt to confuse and delay, delay,
delay, delay, delay....I fail to see how anyone can seriously pay for the
production of this sort of nonsense.

---
Blackbutt, Australia

[ Reply to This | # ]

Question about USL vs. BSDI
Authored by: beast on Monday, September 13 2004 @ 09:56 PM EDT
I am not sure if I am recalling this correctly, but did the USL vs. BSDI lawsuit
not concern System V at all? The last ATT version I thought was involved was
32V.

If this is the case then this memorandum is even less of a concern.

In IBM's memorandum for PSJ on Breach of Contract Claims, the testimony is about
the System V contracts. The testimony that TSG quotes would be about the
disputed material in USL vs. BSDI i.e,, older versions of UNIX. The older
depositions may very well indicate ATT's stance at that time, and which had
certainly changed by the time that IBM was discussing the licensing of System
V.

I look forward to the responses, but right now I am going to go climb some walls
for a few hours. :^)

---
Delay is the deadliest form of denial. - C. Northcote Parkinson

[ Reply to This | # ]

There is no "Linux License"
Authored by: Anonymous on Monday, September 13 2004 @ 10:07 PM EDT
At least that is what SCO says around pp 69-71.

They define the license as:

"The agreement defines “SCO IP Rights” (further language IBM declines to
acknowledge) as “SCO’s intellectual property rights in any and all past, current
or future versions or portions of the SCO’s software products commonly known as
UNIX System V and/or UnixWare” concurrent with run-time use of Linux."

Which I can't even parse. But then they go on to say:

"The definition explicitly exempts Linux from its definition: “SCO IP
rights shall not include any right to copy, distribute, modify or alter Linux
Software.”"

So IBM can't disclose stuff that IBM wrote into Linux, because that is violatins
SCO's rights, but I can then take the resulting Linux product, with or without a
SCO license, and give it to anyone I want?

I guess we are all off the hook now, except for IBM. Oh, and SCO customers.
SCO just said we were. I think.

---
In matters of style, swim with the current, in matters of principle, stand like
a rock.
--Thomas Jefferson

[ Reply to This | # ]

IBM had the Wilson and Frasure deposition.
Authored by: rsteinmetz70112 on Monday, September 13 2004 @ 10:08 PM EDT
"Only after the depositions had been taken did SCO find that IBM’s
production of documents included the deposition transcripts of Mr. Wilson’s and
Mr. Frasure’s flatly contradictory sworn testimony excerpted above ...:

Interesting, but SCOG may have had them too, who knows.

---
Rsteinmetz

"I could be wrong now, but I don't think so."

[ Reply to This | # ]

SCO's Memo in Support of its Expedited Motion to Enforce the Scheduling Order - text
Authored by: eric76 on Monday, September 13 2004 @ 10:09 PM EDT

Am I interpreting this correctly?

Similarly, while IBM rhetorically claims it is only seeking protection for its “homegrown” and “original” work, IBM asks in the fine print of its contract motion for the right to have copied and otherwise exploited with impunity a seminal, industry-changing innovation in ways that black-letter law would enjoin as misappropriation – before contractual protections are even considered.

Are they saying that copying and use the code permitted by the contract is illegal because of federal law?

I think that copyright law lets the owner determine the rules for making copies and modifying the work. It seems to me that they are arguing that if the copyright owner permits others to make copies and modify the work, it is illegal for someone with that permission to actually do so.

[ Reply to This | # ]

SCO's Memo in Support of its Expedited Motion to Enforce the Scheduling Order - text
Authored by: Anonymous on Monday, September 13 2004 @ 10:15 PM EDT
It seems to me that most of these arguments should have been made in the reply
memorandums to the IBM partial summary judgement motions, not an additional
memorandum.

As the non-infringment PSJ is due on Wednesday will this document be read by the
Judge prior to that hearing?

I notice that the Novell - Santa Cruz APA is being selectively quoted again. The
items that stand out are

1. The sole exclusion to the transferred assets were the SVRX royalties, we all
know that copyrights amongst other assets were excluded.

2. The quotation from amendment 2 about the clarification of the copyright
transfer ignores the fact that this is a modification of the general copyright
exclusion.

Surely allowing these inaccuracies to accumulate, which will no doubt be pointed
out by IBM, will affect the credibility of the TSG lawyers in the eyes of Judge
Kimball.

[ Reply to This | # ]

Check this out in Amendment X
Authored by: rsteinmetz70112 on Monday, September 13 2004 @ 10:18 PM EDT
"Nothing in this Agreement shall prevent LICENSEE from developing or
marketing products or services employing ideas, concepts, know-how or techniques
relating to data processing embodied in SOFTWARE PRODUCTS subject to this
Agreement, provided that LICENSEE shall not copy any code from such SOFTWARE
PRODUCTS into any such product or in connection with any such service. .
."

This prety well torpedos all of SCOG's theories.

Check me out, IBM can do prety much whatever it wants as long as they don't use
any ATT code. h

---
Rsteinmetz

"I could be wrong now, but I don't think so."

[ Reply to This | # ]

SCO's Memo in Support of its Expedited Motion to Enforce the Scheduling Order - text
Authored by: John Hasler on Monday, September 13 2004 @ 10:26 PM EDT
> 3. The Plain and Unambiguous Language of the License
> Agreements Directly Contradicts IBM’s Interpretation.

Didn't they learn from DC? Are they not, by admitting that the contract is
unambiguous, allowing the judge to ignore all of the external evidence and rule
on the contract PSJ on the basis of what he sees within the four corners of the
contract? Surely there is no need for depositions if the contract is
unambiguous.

The BSD stuff seems to me to be completely irrelevant: it was a different
contract with a different customer. There is nothing contradictory in asserting
that contract A with customer B does C while asserting that contract D with
customer E does not do C.

[ Reply to This | # ]

SCO's Memo in Support of its Expedited Motion to Enforce the Scheduling Order - text
Authored by: blacklight on Monday, September 13 2004 @ 10:36 PM EDT
I feel sorry for Judge Wells who has to dip her hands into this diarrhea - and
it ain't finger-licking good. The fact remains that as of now, SCOG has no
evidence to use to contradict IBM's PSJ and has admitted to this fact by saying
that they need time to "develop" this evidence. The problem is that
they can't develop evidence without discovery, and the discovery they are
demanding is not calculated to bring in any new evidence that might bolster
their case, because it is totally dependent upon the assumptions and
presumptions SCOG makes about IBM's CMVC system - assumptions and presumptions
that SCOG simply pulled out of its corporate butt. SCOG has yet to learn that
repeating the same dumb arguments does not make them any more convincing the
next time around.

As for the apparent "contradictions" in David Frasure's testimony for
example, I can't say much except that suing the UC Berkeley was a sobering and
humbling experience for AT&T, and whatever interpretations AT&T had
before the trial had to be readjusted as a result of the trial. SCOG is probably
engaging in an exercise of quoting out of context, but others who are more
knbowledgeable than me should speak up.

[ Reply to This | # ]

September 15 = DDAY
Authored by: Anonymous on Monday, September 13 2004 @ 10:46 PM EDT
It's coming. I hope that SCO's current drivel doesn't waylay the judge. IBM's

arguments are multiple and thus summary judgment may be made if only one
of them holds. SCO can't stop them all.

If hope that SCO's arguments about the contract with Novell opens up the can
of worms regarding SCO's standing and alleged copyrights. Thus this case
can also decide if SCO has any copyrights to Unix System V - which they do
not. Where is the missing transfer of copyright document from OldSCO to
Caldera (NewSCO), for example.

[ Reply to This | # ]

SCO's Memo in Support of its Expedited Motion to Enforce the Scheduling Order - text
Authored by: kbwojo on Monday, September 13 2004 @ 10:47 PM EDT
I see SCO has a new game. IBM now has to take the time to refute this whole bag
of crap from SCO. They put in so much crap they are hoping IBM will have to ask
for delays to respond to this. They will then claim again publicly that IBM is
delaying this trial.

[ Reply to This | # ]

PROJECTION !
Authored by: Anonymous on Monday, September 13 2004 @ 10:48 PM EDT
There is a psychological process called projection where
one projects ones own thoughts/feelings/failings onto
the other. SCO is projecting it own failings and weakness
onto IBM in this filing.

Read it as a large Freudian slip.

Their failings/weakness/flailing leakage is amazing.

[ Reply to This | # ]

SCO's Memo in Support of its Expedited Motion to Enforce the Scheduling Order - text
Authored by: blacklight on Monday, September 13 2004 @ 11:06 PM EDT
SCOG most probably quoted David Frasure et al out of context to manufacture a
conflict of facts to defeat IBM's PSJ. David Frasure may or may not have been
convicted of a felony but that conviction - assuming that it tok place, is
irrelevant: David Frasure's testimony may not stand on its own because of this
alleged conviction, but his testimony is consistent with the other declarants
and with the text of AT&T's $echo newsletter. All IBM has to do is to
produce an affidavit by the declarants that SCOG is quoting them out of context,
and SCOG's manufactured conflict of facts vanishes like a flake of sun under a
hot sun.

In summary: no conflict as to the facts, discovery requests that are both
onerous and bound to fail to produce relevant evidence, and agreement that the
text of the AT&T contract is plain - actually, it's not that plain but why
quibble? I'd say the time is right for a PSJ.

[ Reply to This | # ]

TSG finally writes one professional filing but TSG has no evidence
Authored by: Anonymous on Monday, September 13 2004 @ 11:09 PM EDT
This is the first well written document coming from TSG. It is full of lies,
but it is well written. From now on, everyone knows that TSG has been
slacking off on all its other legal filings.

Now that we see one well written document, notice that it lacks case
references and facts. Most every statement shouts at you, but these are
baseless claims without a shred of legal evidence. This is a polical debate
rather than a legal brief.

Because the Magistrate has twice ordered TSG to submit their evidence
and TSG has submitted squat, IBM has every legal right to request their
partial summary judgments.

The alternative is for TSG to go before a jury with NO evidence and
bamboozle the jury. McBride has mentioned the OJ trial many times in
his public statements. Its as though he has his own strategy to win
these cases.

A modern operating system IS an encyclopedia of hardware drivers, file
systems, communications protocol stacks, run time libraries (e.g., math
routines), streaming audio support, streaming video support, tool chains,
interprocess support (e.g., RPC), security (e.g., Kerberos), Window
systems, virtual machines (e.g., Java), and much, much more. Most of this
stuff NEVER existed in ATT's extinct flavor of UNIX.

TSG is the Joker in the deck claiming they own the world of software.

[ Reply to This | # ]

Mixing the PSJs. Need to separate the arguments
Authored by: Thomas Frayne on Monday, September 13 2004 @ 11:11 PM EDT
Most of the arguments that SCOG has made in this memorandum concern the other
PSJs, not the CC10 PSJ. To clarify the issues, we need to separate the
arguments into several categories:

1. Those common to all the PSJs
2. Those remaining that apply to the CC10 PSJ
3. Those that do not apply to the CC10 PSJ

The arguments in categories 1 and 2 need to be analyzed first, because IBM will
need to address them by September 24, when it files its opposition to SCOG's
supplementary memo, and on October 29, during oral arguments.

Judge Kimball will probably not want to rule on the CC10 PSJ until he knows all
the arguments that SCOG is entitled to make that SCOG claims counter IBM's
arguments in favor of the PSJ. He needs to have all those arguments presented
before he rules, or he has to rule that SCOG is not entitled to make those
arguments.

SCOG will appeal a ruling granting the PSJ, and Judge Kimball needs to make the
ruling as appeal-proof as possible.

One thing that Kimball could do would be to schedule the briefing for this
motion so that the motion is fully briefed in time for oral arguments at the
October 19 hearing. I don't know if it is possible, but if Judge Kimball could
split the motion so that all arguments addressing CC10 would be briefed early,
and the remaining arguments later, that would be ideal.

On the other hand, perhaps Judge Kimball could rule that this memorandum
violates the order forbidding new memos related to discovery, and refuse to
accept it, perhaps with a ruling that all memos related to the other PSJs should
be submitted after October 19. This would not gag SCOG, since SCOG is scheduled
to file a memo on October 1.

[ Reply to This | # ]

SCO's Memo in Support of its Expedited Motion to Enforce the Scheduling Order - text
Authored by: Glenn on Monday, September 13 2004 @ 11:15 PM EDT
In reading some of the materials on the original USLvsBSDI case, it does seem
as though AT&T at one time did have some idea that it could control that it
could control what licensees di with code from derivative works, at least as far
as BSDI and the University were concerned, i.e. there was mention of this in
some letters between the University and AT&T with the University insisting
that the license agreement be interpreted in the narrowest sense. This is also
consistent with the IBM and Sequent positions that they would never have agreed
to a license so singularly crippling their rights to their own property.
This being a dispositive motion, will not Judge Kimball rather than
Magistrate Wells handle this one?
Also the SCOG did not attack any of the other depositions except to say that
they had not been tested. How is a deposition tested?
Also, can testimony from a trial where the settlement has been sealed be
introduced as evidence in another proceeding?

Glenn

[ Reply to This | # ]

Another SCOntradiction
Authored by: Anonymous on Monday, September 13 2004 @ 11:26 PM EDT
COMPARE AND CONTRAST

Footnote 6:
6 SCO has sought production expressly for the purpose of showing this progression: “SCO, based on the information currently available, has attempted to identify the specific lines of code from UNIX System V from which IBM’s contributions from AIX and Dynix/ptx were derived.” Letter from B. Hatch to T. Shaughnessy dated Apr. 19, 2004, at 2 (Exh. 33).


VERSUS:

(And note this is the very same exhibit that they cite)

April 19th Brent Hatch letter [pdf] to IBM:

See item 3 on pages 2-3, including

Based on the forgoing, the entirety of UNIX System V licensed to IBM and Sequent are the lines from which IBM's contributions of AIX and Dynix/ptx are derived.

In addition to identifying the entirety of UNIX System V as the specific lines of code from which IBM's contributions from AIX or Dynix/ptx are derived,....(etc)

I can't be bothered to retype it, if somebody has the above transcribed, please post a link to the text version.


Quatermass
IANAL IMHO etc

[ Reply to This | # ]

SCO's Memo in Support of its Expedited Motion to Enforce the Scheduling Order - text
Authored by: blacklight on Monday, September 13 2004 @ 11:34 PM EDT
SCOG seems to have a fixation that its argumentation will be more compelling, if
SCOG makes the text of its pleadings close to unreadable: let it be said that
once in a while, SCOG comes up with an original idea. "If you can't dazzle
them with brilliance, baffle them with bullshit".

[ Reply to This | # ]

SCO's Memo in Support of its Expedited Motion to Enforce the Scheduling Order - text
Authored by: Anonymous on Monday, September 13 2004 @ 11:37 PM EDT
After reading this drivel, I'd rather go back to reading IBM's Redacted
Memorandum in Support of IBM's Motion for Partial Summary Judgment on Breach of
Contract Claims.
Now, that made sense!

[ Reply to This | # ]

Have a nazgul weekend
Authored by: Anonymous on Monday, September 13 2004 @ 11:53 PM EDT
...IBM went so far as to serve its contracts motion on SCO’s counsel at his home at 9 p.m. on Friday, August 13...

Hehe ... have a nice weekend!

[ Reply to This | # ]

SCO's Memo in Support of its Expedited Motion to Enforce the Scheduling Order - text
Authored by: blacklight on Tuesday, September 14 2004 @ 12:00 AM EDT
SCOG's case management efficiency argument is (inadvertently) hilarious: SCOG's
latest motion is an example of SCOG's using Judge Kimball's docket as their
private sewer line. I submit that case management efficiency will rise sharply
once SCOG's motions for discovery are tossed out, and the PSJ's are dealt with
without any further delay.

[ Reply to This | # ]

You might be a former SCO employee!
Authored by: Anonymous on Tuesday, September 14 2004 @ 12:05 AM EDT
21 Mr. Frasure’s counsel, James G. Szymanski, has served in several in-house legal capacities for IBM, and has represented IBM in numerous notable cases. See Exh. 17. Aside from Messrs. Wilson and Frasure, IBM’s counsel have entered into attorney/client relationships with several former employees of AT&T and USL – companies that are SCO’s predecessors in interest to the UNIX code and business – thereby precluding SCO from even talking to these individuals (who are, in effect, its former employees) about the very issues that IBM claims are not disputed.

If you ever worked for
  • Santa Cruz Operation, Inc. (Tarantella)
  • Novell
  • USL
  • AT&T

It seems that SCO thinks that you're one of their "in effect, a former employees"

Come on fess up - who's a former SCO employee? When you were at college, did you ever had a summer job with the phone company? You might belong to Darl. Best to send him all your money now, to save time later.

Quatermass
IANAL IMHO etc

[ Reply to This | # ]

SCO's Memo in Support of its Expedited Motion to Enforce the Scheduling Order - text
Authored by: Anonymous on Tuesday, September 14 2004 @ 12:12 AM EDT

``The April and August 1985 editions of that newsletter simply announced – as the sections quoted by IBM make clear – that AT&T would be revising its standard agreement to address the ownership of modifications and derivative works prepared by licensees. See Exhs. 10, 11, as with the IBM Side Letter Agreement, the newsletter never suggested in any way that the clear and explicit use and disclosure restrictions in the license agreements would be diminished or eliminated.''

I consider myself a fairly reasonable person and I got no meaning like that from the $echo statement. I guess it wasn't stated quite clearly enough in the $echo article. Of course, knowing how stubborn or thick -- take your pick -- SCO is, IBM deposed the folks from ATT that were involved in the licensing. Just to make sure SCO would see what the meaning of the contract was. But, apparently, that wasn't even enough for SCO. One wonders just how clear the point "what's ours is ours and what's yours is yours" must be made before these guys will get it. May be some time, unfortunately, before anyone is going to get it through their heads that "these are our toys and those are your toys... but we'll decide when and how you can play with your toys" isn't what ATT intended. (Just what did the guys from SCO learn in kindergarten?)

[ Reply to This | # ]

SCO's Memo in Support of its Expedited Motion to Enforce the Scheduling Order - text
Authored by: dan_d on Tuesday, September 14 2004 @ 12:17 AM EDT

SCO objects that IBM abusrdly asserts a right

"to freely appropriate from UNIX so long as they did not literally copy UNIX code"

Freely appropriate what, exactly? Trade secrets that SCO refused to identify and has implicitly admitted don't exist? "Methods or concepts" that were developed originally by IBM? Unless they think that they can magically combine sections 2.01 and 7.06 to mean that IBM is prohibited from disclosing any method or concept contained in AIX, even if those methods or concepts originated with IBM, since AIX is part of the SOFTWARE PRODUCT? Then again, the "common law" of copyright "plainly" extends to methods and concepts in their world. They will be sadly disappointed to learn the truth on that one.

One other thing I don't get:

The Santa Cruz Organization, Inc.

Why do they keep getting the name wrong? Don't they realize it makes them look foolish?

[ Reply to This | # ]

About Contracts
Authored by: Glenn on Tuesday, September 14 2004 @ 12:55 AM EDT
And one last thing, does anyone know of a similiar dispute where one entity
claimed to have control rights over the disemmination of another's intellectual
property?

Glenn

[ Reply to This | # ]

"It shall be moon, or star, or what I list"
Authored by: penfold on Tuesday, September 14 2004 @ 01:29 AM EDT
It is amazing seeing SCOX stick to this merry-go-round they built.

"If IBM’s interpretation were correct, then the requirement that “resulting
materials” be “treated as part of the original SOFTWARE PRODUCT” would be
rendered superfluous, because UNIX source code is already clearly and
indisputably contained within the original SOFTWARE PRODUCT. In other words,
there would simply be no reason for the contract to treat source code contained
in “resulting materials” “as part of the original SOFTWARE PRODUCT” if such
source code is already automatically included in the original SOFTWARE
PRODUCT."

If I am reading this correctly (and it's a painful read as others have noted),
it sounds like they are saying that Derivative Works ARE the software product.
The "Resulting Materials" is all the rest that ever mingled with with
Unix code.

And they seem to use this portion to justify calling things whatever they wish:

"...neither of the parties shall be bound by any conditions, definitions,
warranties, understandings or representations with respect to such subject
matter other than as expressly provided herein or as duly set forth on or
subsequent to the date of acceptance hereof in writing and signed by a proper
and duly authorized representative of the party to be bound thereby."

So, the conditions and definitions of Copyright Law is outside the scope of the
license? (E.g. Derivative Work is a work that contains other protectable
material?)

Curiousier and curiousier....

---
The worth of man is determined by the battle between good and evil in the mans
subconcious.The Evil within is so strong that the way to win is to deny it
battle

[ Reply to This | # ]

IBM is addressing this.
Authored by: rao on Tuesday, September 14 2004 @ 02:04 AM EDT

This was driving me nuts a couple of months ago. Back then I was asking if the judge could make a ruling on SCOX's "derivative works" interpretation. I guess the judge cannot make a ruling on something unless somebody puts it in front of him though.

In the mean time IBM has gotten depositions from everybody who ever had anything to do with the contract and their testimony blows away SCO's interpretation. So now it is in front of the judge in one of the PSJ requests. It's all dealt with in excruciating detail in the previous post: IBM's Redacted Memo in Support of Motion For PSJ on Breach of Contract Claims - as text, Monday 06:25 PM

It must be very frustrating to be a lawyer at times. You have to spend months taking depositions and generating reams of paperwork just to make a point that seems like common sense. It almost makes me sick to think about all the trees that were killed just to support Darl's folly. I guess this is one of the things people refer to as "the price you pay for freedom."

[ Reply to This | # ]

Wheeeee! Too much fun!
Authored by: Anonymous on Tuesday, September 14 2004 @ 02:36 AM EDT
There are just too many great punchlines in this one! SCO is definitely gearing
up for a guest spot on Saturday Night Live. I haven't laughed this hard in
ages!

Some of my favorites:
"...IBM’s...[]...its effort to rewrite history..."
This, with a straight face, from the company who brought you 25 years of Unix...
in less than 5 years.

"...sixteen months into a case about programming..."
Er..no... its about trade secrets... no, we meant copyrights... no, contracts...


"And while IBM expressly asks this Court to rely on the absence of certain
evidence, IBM asks the Magistrate Judge in separate filings to block SCO’s
access to that very same evidence on the ground that it is “wholly
irrelevant.”..."
Poor SCO, couldn't identify any UNIX code because IBM wouldn't let them have
access...

"...purports to support these attacks on Court Orders with selective
quotations that omit material from the Court Orders and from publicly available
documents on which the Orders are based."
Make them play fair, your Honor, like us! IBM keeps misquoting documents and
distorting the courts orders! Its as bad as their attempts to rewrite history!

And my favorite...
"IBM’s remarkable contractual interpretation warrants at least full
factual exposition of the circumstances under which the parties contracted and
each party’s intent in contracting."
Yes your Honor, even though the contract language is plain and unambiguous, and
all the parties to it have declared to the circumstances and intent as being in
favor of IBM under oath, and even though we weren't a party to it, and we only
acquired some minor interest in it through some acquisitions from a successor in
interest to the successor in interest to to the original party, and even though
we lost our copy of that purchase agreement which probably didn't transfer
anything much at all anyway since the successor we bought it from hadn't ever
gotten any copyrights, we still need a few more months of fact discovery on this
issue to expose the truth.

The only gag SCO hasn't used yet in this comedy routine is the rubber chicken.
Probably saving that for wednesday...

[ Reply to This | # ]

Looks like SCO pulled an ace
Authored by: Anonymous on Tuesday, September 14 2004 @ 03:13 AM EDT
Don't know - my reading of the contradicting Wilson and Frasure declarations
testamonies seems to blow a whole in the credibilty of IBM's witnesses if this
case is about *bridge of contract* where the contract was between IBM and
AT&T.

Futher - if the side letter (echo publication) granted rights as IBM claims it
does - how does one explain that this fact was never raised or used in defense
in the USL/BSD lawsuit. A lot seems to depend on the agreement reached between
parties in this case since this is the only reasonable explanation of the
seemingly contradictory staments by Wilson/Frasure.

Another thing - please remind me again - SCO made it clear at one point that
this is not about *bridge of contract* but about *copyright infringement* -
whereas this entire argument is about bridge of contract and not about copyright
infringement.

Or can copyright law be modified by contract?

[ Reply to This | # ]

The Contract Claims PSJ
Authored by: Anonymous on Tuesday, September 14 2004 @ 03:17 AM EDT
OK, I admit I didn't have the stamina to read the whole thing. However, I did
skim the section relating to SCO's argument that the testimony of the AT&T
execs contradicted what they had said in the BSD case, and I eventually caught
on to the trick they were using to make their argument sound semi-plausible.

The (consistent) position of the AT&T execs: We control Unix System V, and
derived works of that. Simply bundling your code with Unix System V, or
something derived from it, does NOT bring your code under our control.

That's what they said in USL v BSD, and it is what they are saying now. The
difference is that they saw BSD as being directly derived from SysV, whereas
they do not put the majority of IBM's code in that bucket.

SCO's 'fast one' (and attempt to engineer the 'contradictory' testimony) is to
deliberately misinterpret what IBM is saying about the contract. They claim IBM
characterises it as referring only to 'literal copying'.

SCO is quite correct that the contract is unambiguous about applying to derived
works of UNIX System V.

So *if* IBM were interpreting the contract the way SCO says they are, then IBM
would indeed be incorrect.

But, in fact, IBM says that if they combine X with SysV, then the license
limitations apply only to the (X + SysV) combination. They do NOT apply to X on
its own, leaving IBM free to do whatever they want with that. And the AT&T
execs are agreeing with them.


Which, of course, IBM would be quite happy to point in their Reply Memorandum,
if SCO wasn't currently trying to avoid having to answer *any* of the PSJ's.

[ Reply to This | # ]

February vs September
Authored by: Anonymous on Tuesday, September 14 2004 @ 05:21 AM EDT
It may be much colder in February. But September is hurricane season. QED?

[ Reply to This | # ]

SCO's Memo in Support of its Expedited Motion to Enforce the Scheduling Order - text
Authored by: ile on Tuesday, September 14 2004 @ 05:41 AM EDT
But even if it were correct, it would not apply: even if the chinese walls idea
were relevant, it would be so for trade secrets and patent liability. And would
not be needed at all for homegrown code that has been then ported to a UNIX
derivative. There is actually _NO_ contradiction that I can see between then and
now in Frasure's depositions.


Or have I got it all wrong? (I am not even a US citizen nor resident...)

[ Reply to This | # ]

It's not about copyright infringement.
Authored by: Anonymous on Tuesday, September 14 2004 @ 06:14 AM EDT
I think - if anything else - SCO has made it abundantly clear that their suit is
not about copyright as understood under copyright law.

This is about the original AT&T license agreement and SCO is saying that
licensees were/are prohibited to create "derivatives of Unix" or
anything that smells of Unix or enhances whatever may smell of Unix -
irrespective of whether it involved literal copying.

Therefore - the USL/BSD lawsuit seems to be very similar to this one.

[ Reply to This | # ]

They just can't help themselves, can they?
Authored by: overshoot on Tuesday, September 14 2004 @ 07:08 AM EDT
I finally realized why all of SCOX' memos look the same (besides the "we need all documents that IBM has ever produced" whine) -- every one tries to argue the whole case.

The can't stick to arguing the point. Instead of stating that they have witnesses contradicting IBM's, or facts impeaching them (with attachments), they try to argue the details on copyright in the contract memos, the details on contract in the copyright memos, Andrew Tannenbaum's invention of EMACS in all of them, etc.

[ Reply to This | # ]

SCO's Memo in Support of its Expedited Motion to Enforce the Scheduling Order - text
Authored by: AdamBaker on Tuesday, September 14 2004 @ 08:19 AM EDT
I'll admit to only skim reading this but it looks as though the only actual
argument SCO are putting forward is that the court has the discretion to delay
the SJ motions if it so wishes.

The rest of the document is discussing the merits of the SJ motions. Surely if
SCO have so much to say about the merits of the SJs then we should have the SJ
hearings.

Is there any reson for the court to think differently?

[ Reply to This | # ]

The Dates.
Authored by: coffee17 on Tuesday, September 14 2004 @ 09:06 AM EDT
In Nevada, a hearing could be scheduled for an emergency motion in as little as
a 5 business days ... from the 8th to the 15th is 5 business days. Is that a
conincedence? Does anyone know how Utah rules relate to how quickly an
emergency motion can come to trial? Certainly getting this in on the 8th with
all the players coming to town sets things up to hear it (it is an emergency
after all) on the 15th.

[ Reply to This | # ]

SCO's Memo in Support of its Expedited Motion to Enforce the Scheduling Order - text
Authored by: RealProgrammer on Tuesday, September 14 2004 @ 11:44 AM EDT
It pains me to even repeat this garbage:
"IBM also presents witnesses claiming that AT&T was ready and willing to let IBM and Sequent remove those express terms if they had wanted to, and to ask nothing in return. But IBM also tells the Court that IBM and Sequent nevertheless simply chose not to do so – needlessly (and inexplicably) letting their claimed rights depend on linguistic contortions and extrinsic evidence (presumably including IBM’s ability, as needed, to have witnesses flatly contradict their prior testimony once IBM came to “represent” them)."emphasis added

Unbelievable desperation.

The simple explanation was given over and over by all the witnesses. IBM bought a source code license for the expressed purpose of creating a derivative. They simply would not have entered a contract which effectively would have made their alterations AT&T property.

It's also the reason Sequent, the Santa Cruz Operation, Microsoft, and every other UNIX vendor who bought a source code license did so.

---
(I'm not a lawyer, but I know right from wrong)

[ Reply to This | # ]

Implied SCO Accusations
Authored by: UnixGuy on Tuesday, September 14 2004 @ 06:01 PM EDT
As I read this, it seems like SCO is implicitly accusing Frasure et al. of
perjuring themselves in their depositions, and IBM of suborning perjury of those
witnesses.

Isn't the court likely to frown on that kind of accusation being thrown around
without strong evidence?

They don't use those words, but they claim the depositions for IBM directly
contradict their prior sworn testimony, cite supposed present-day relationships
with IBM, and allude to a case of insurance fraud with regard to one of the
witnesses. I am curious what kind of reaction this may draw from the court - or
has the court seen enough that they won't blink an eye at this sort of innuendo?

[ Reply to This | # ]

SCO's own arguments contradict them
Authored by: GLJason on Tuesday, September 14 2004 @ 06:10 PM EDT
IBM’s argument is baseless. SCO shows in Parts II.A.2-3, below, that the agreements clearly and expressly (1) protect against the misappropriation and unauthorized disclosure of “modifications” and “derivative works” – without any showing of literal copying; (2) protect against misappropriation of UNIX “methods or concepts” – without any showing of literal copying; and (3) do not once mention any limitation on the licensor’s protection to protection against only literal copying.
SCO just doesn't get it. A "modification" and "derivative work" is only such if it is still in place with some preexisting material. Let's say that SCO produces camera bodies and that IBM develops a lens for use with it. Certainly when used with SCO's camera body it is a modification of the camera. When used with a different camera body, it is no longer a modification of SCO's camera body. Clearly in the law, derivative works MUST contain protectible elements of the original work. By specifically using that term in the contract, that is what the law should take it to mean.

Here is one paragraph, broken up so that I can address their false notions:

(1) Moreover, IBM’s claimed right to make and appropriate for itself copies of SCO’s code, so long as the copies are not literal copies, is one that IBM would not even have under the copyright laws.
Where has IBM ever claimed the right to appropriate SCO's code? In fact, they have said they never did such a thing and SCO has yet to show any proof of it, although they have claimed to have "truckloads" of examples and three teams of experts that worked on it.
(2) Basic copyright law has long recognized that copying can occur through the making of “derivatives” without any literal copying at all. (ft. 8)
I do not think that SCO or their attorneys understand copyright law, or the cases (Gates Rubber) that they quote. Their statement is of course true here, but does nothing to support their position. Look at their footnote 8. I have no idea why SCO would include this, it undermines their position. The cases they site do indeed say you do not have to have lines of code copied character for character. However they say that "substantial similarity" is required. Substantial similarity between IBM's code (or Linux) and UNIX is one thing that SCO has failed to show.
(3) Moreover, the common law not only protects “methods or concepts,” but also extends farther, beyond trade secrets, and far beyond literal copying. IBM’s claim thus reduces to the untenable proposition that under the terms of the license agreements, IBM can do what copyright and common law would forbid: make non-literal copies of another’s work and innovation, and thereby misappropriate that innovation for itself.
Where do they get this from? There are no footnotes here showing where common law protects "methods and concepts" in computer code. That's because it simply does not exist. The courts have found that the basis for any computer program will be an unprotectable idea. The expression of that idea is what is protectable.

see 17 U.S.C. Section 102(b) (Copyright protection does not extend to any “idea, procedure, process, system, method of operation, concept, principle, or discovery” embodied in the copyrighted work.).

See Sony vs. Connectix:

The object code of a program may be copyrighted as expression, 17 U.S.C. Section 102(a), but it also contains ideas and performs functions that are not entitled to copyright protection. See17 U.S.C. Section 102(b).
Connectix made a bios that resembled Sony's Playstation bios call for call, yet it was not infringing. Exactly what "non-literal copying" does SCO maintain that IBM did?

They try to say that IBM must protect UNIX "methods and concepts" because of section 7.06 of the license agreement. I take this to mean that IBM cannot release JFS because it is a UNIX file system driver and it intereacts with the kernel in order to be a file system. They need to re-read the agreement that AT&T give to licensees:

7.06 (a) LICENSEE agrees that it shall hold all parts of the SOFTWARE PRODUCTS subject to this Agreement in confidence for AT&T. LICENSEE further agrees that it shall not make any disclosure of any or all of such SOFTWARE PRODUCTS (including methods or concepts utilized therein) to anyone, except to employees of LICENSEE to whom such disclosure is necessary to the use for which rights are granted hereunder. LICENSEE shall appropriately notify each employee to whom any such disclosure is made that such disclosure is made in confidence and shall be kept in confidence by such employee. If information relating to a SOFTWARE PRODUCT subject to this Agreement at any time becomes available without restriction to the general public by acts not attributable to LICENSEE or its employees, LICENSEE'S obligations under this section shall not apply to such information after such time.
The information necessary to create a file system for a Unix operating system became available to the public with AT&T's authorization when they agreed that BSD could be distributed in their settlement, and has been available since 1991 with Linux, due to no action on IBM's part. Therefore section 7.06 protection lo longer extends to any "method or concept" in UNIX that is also in BSD or Linux.

[ Reply to This | # ]

SCO errors in memo
Authored by: MadScientist on Tuesday, September 14 2004 @ 06:16 PM EDT
Aside form a lot of verbiage about discovery there are a number of clear
mistakes in this memo

+++++++++++++++

IBM’s Motion for Summary Judgment on Its Claim That SCO Infringed IBM’s
Copyright.

"does not inform the Court that SCO has never licensed anything but the
right to use UNIX proprietary information – which SCO owns – whether found in
Linux or elsewhere"

False: newSCO inherited its rights from Caldera which did licence Linux. SCO are
being very literal with the truth here: since SCO was created SCO have not
publically made any such statements about the licence. They have continued to
provide Linux at the ftp site with the GPL attached.

++++++++++++

IBM’s motion thus reduces to the indefensible claim that SCO may not license its
own proprietary information

False. IBM have never made any such claim. This is completely bogus. But it does
raise the question: exactly what IP does SCO own?

++++++++++++++++

IBM’s Motion for Summary Judgment on Its Claim That It Was Contractually
Permitted to Copy and Distribute UNIX Material without Restriction.

False: IBM can redistribute GPL'ed code such as Linux without restriction - not
Unix Sys V which they have never done.

For the record SCO: Linux != Unix Sys V

+++++++

If I have time later I will comb through this document again.

Whatever else this document one can say about this document it is *clearly*
superior to the previous ones. It really is a shame that SCO dont really have a
leg to stand on else this chap might really be worth the money someone is paying
him/her.

+++++++++

For the record, SCO, it is considered better form to put the references in a
list somewhere. Maybe this memo was put out in a hurry?

If this is so them the quality of the work is excellent for work done at short
notice. Its really is a shame that the vast bulk of preceeding work has been
such a let down - even disregarding the lack of a case in the first place.

[ Reply to This | # ]

Mental contamination
Authored by: GLJason on Tuesday, September 14 2004 @ 06:34 PM EDT
They quote a lot from Frasier's deposition in the BSD case. Funny how USL ended up settling that case and letting BSD be distributed to the public. All of the statements about "mental contamination" go to the "methods and concepts" and are not protectable under copyright law, just under the contract. And section 7.06 of the contract specifically states that if the information is released to the public through no fault of the licensee (hello, BSD as per the USL/BSD settlement), then the licensee no longer has to protect those "methods and concepts".

It's my understanding that BSD was nearly 10 times as large as UNIX when it was released and contained nearly all of the "methods and concepts" that would have been protected by section 7.06. Am I wrong?

[ Reply to This | # ]

?IBM’s overtly fact-intensive motions?
Authored by: ThungurKnifur on Wednesday, September 15 2004 @ 05:35 AM EDT
"
SCO either has to answer IBM’s motions without even a “reasonable” extension of
time on the very dates of the discovery hearings IBM sought to avoid, or else
waive its rights to seek discovery to answer IBM’s overtly fact-intensive
motions
"

Yeah that must be a problem for SCO attorneys, they are not used to dealing with
"fact-intensive motions", the motions they present would be more
appropriate to call "intense fiction"

[ Reply to This | # ]

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