"Although G2 has not articulated a specific interest in the disclosure of any materials in connection with this case, SCO does not oppose G2s limited motion for intervention."

Right. They don't know why they want to intervene, but there's no objection. Puh-lease. Lawyers don't free fall, ever. They want to know where every rock and tree branch is all the way down before they jump. So we need to look more closely at what this is all about.

They don't at all support G2's desire to unseal everything:

"The Protective Order in this case has been necessary in order to permit the parties to disclose documents as part of the ongoing discovery process and to present confidential materials to the Court efficiently. . . . Where, as here, the parties have made their confidentiality designations in good faith, the rationale for the Protective Order remains."

So much for G2's insinuations that there was hiding going on. SCO says the parties have exercised good faith in their designations. They go on to agree with IBM that not all documents filed with the court are public documents, and they say the public has no right to pretrial discovery documents. In a footnote, they list the October 19, 2004 hearing on discovery issues in that pile. That hearing was sealed by the court, not by the parties, after SCO read some materials marked confidential by IBM aloud. They also don't want their correspondence with IBM and the Court opened to the public. As for the rest, they are not sounding too enthusiastic except they seem to make a possible exception with regard to non-discovery motions:

"If the court determines that certain documents at issue in the parties' pending motions (such as IBM's motions for summary judgment and SCO's motion to amend its complaint) are material, then the Court should resolve the question of public access to those documents by balancing any presumption of access that applies against countervailing factors, including privacy interests and the interest of judicial efficiency."

I guess they wouldn't mind if materials they think would harm IBM were unsealed, while keeping their warts covered, but since it isn't likely to be one-sided, they are decidedly lukewarm about the unsealing idea. However, we find out now why SCO attached confidential IBM emails to their request to amend the complaint. I gather it goes hand-in-hand with G2's motion to unseal. And sure enough, SCO mentions their motion to amend the complaint by name as a document they clearly wouldn't mind having unsealed. IBM naturally points out that the emails are confidential and qualify for protection under the Protection Order. So, it goes like this: first SCO read them out loud "by mistake" at the hearing. I suspect they thought the media would do the rest for them. We didn't. So G2 filed its motion to unseal. But, realizing upon further research that discovery materials are exempt from a public right of access and thus the hearing probably wasn't going to be opened, they attached the emails to their request to amend, so that it conceivably would be subject to public access. And now we know the rest of the story and what this dance has been all about. IBM naturally opposes:

Second, SCO has attached certain internal IBM emails to its briefing on its pending Motion for Leave to File a Third Amended Complaint. (See Docket Nos. 323 & 369.) Like discovery, materials filed in conjunction with a motion to amend do not implicate the adjudicative process and thus are not entitled to any presumption of public access. The internal emails reflect IBM-confidential strategy discussions which are not publicly known, are of value to third parties, and would not be shared with anyone outside of IBM absent an appropriate non-disclosure or other confidentiality agreement. Moreover, these documents do not concern Linux, the "intense public interest" which forms the basis for G2's motion. (Motion to Intervene at 1.) These email documents are properly designated as confidential under the Protective Order and likewise should remain under seal.)

Hardly a resounding Amen to G2's motion from SCO otherwise, however. Perhaps Maureen O'Gara wanted to try to prove she was right after all in what she wrote about the hearing, but neither party is enthusiastic about losing all their privacy for her private interest, not even SCO. Or perhaps she felt like helping a friend out. But SCO has never wanted to be open. Their entire spiel has been about all the secrets we don't know that if we knew them would convince us they are right. SCO actually filed Linux code under seal, we find out in IBM's filing. How funny is that?

So the idea of hanging all their underwear out to dry doesn't appeal. Honestly, I don't blame them. Why should parties in a civil matter have to let the public nose about in all their private information? If you let that happen, it really will block a free flow of information in discovery, and that is serious. That has been my position from the beginning. So, as much as I despise this litigation, in this particular, SCO is right about that, in my view. Not that I wouldn't like to see their underwear. Why they didn't oppose G2's intervention outright was a mystery to me at first, until I got to the part in IBM's response about the attached emails.

As SCO points out, you are supposed to have good cause to unblock files, and what exactly is G2's interest here? Maybe they know it is mighty weak, so guess who are popping up to join G2? Forbes and CNET. Two media outlets that haven't been covering the trial much at all, and in one case not at all, that I know of, certainly not in depth, are suddenly wildly interested in hearing all the details? You find that info in the footnote in IBM's filing. What a cynical bunch.(UPDATE: I see that Forbes has an article on the trial today. What an amazing coincidence. It's inaccurate in certain details, like what might happen if SCO were to prevail, but it is an article about the trial.)

Nobody in the world has covered this trial more than Groklaw, and I don't find the protective order any barrier to proper coverage. If I can do it, so can they. I can't see their request as having much to do with the public's interest. They're an anti-IBM cynical bunch, in my opinion, the lot of them. And as for IBM's description of G2 as the publisher of two Linux-related newsletters, pardon me while I snort. AntiLinux newsletters would be more like it. She looks to me like a SCO partisan and has for some time. Anyway, you need to read IBM's filing to follow the discussion from the point of view of the law on how much does the public have a right to access. It is, both SCO and IBM say, as we've pointed out consistently, a limited right.

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

SNELL & WILMER L.L.P.
Alan L. Sullivan (3152)
Todd M. Shaughnessy (6651)
Amy F. Sorenson (8947)
[address]
[phone]
[fax]

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

Attorneys for Defendant/Counterclaim-Plaintiff
International Business Machines Corporation

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH

THE SCO GROUP, INC., Plaintiff/Counterclaim-Defendant, v. INTERNATIONAL BUSINESS MACHINES CORPORATION, Defendant/Counterclaim-Plaintiff.

IBM'S MEMORANDUM IN OPPOSITION TO G2'S MOTION TO INTERVENE AND MOTION TO UNSEAL COURT'S FILE Civil No. 2:03CV-0294 DAK Honorable Dale A. Kimball Magistrate Judge Brooke C. Wells

Defendant International Business Machines Corporation ("IBM") respectfully submits this Memorandum in Opposition to Motion to Intervene and Motion to Unseal the Court's File filed by proposed intervenor G2 Computer Intelligence, Inc. ("G2").¹

Summary

For over a year, IBM and The SCO Group, Inc. ("SCO") have exchanged hundreds of thousands of confidential documents in reliance on the Stipulated Protective Order entered by this Court on September 16, 2003 (the "Protective Order"). As is common in complex commercial litigation, the Protective Order here provides that any party who believes in good faith that documents to be produced contain information that would be "valuable to third parties" and that "would not normally be revealed . . . to third parties without an agreement to maintain it in confidence" may designate the documents as "confidential" under the Protective Order, rendering them subject to certain limitations on disclosure and use, including that they be filed under seal when submitted to the Court.

Now, G2, a publisher orf two Linux-related newsletters and a stranger to this action, has filed a Motion to Intervene and Motion to Unseal Court's File. Without having any basis for challenging the parties' confidentiality designations herein, G2 nevertheless asserts that the Protective Order must be modified so as to require the parties to prove, and the Court to find, that disclosure of each document filed under seal would cause the disclosing party "specific competitive injury." If G2 prevails on its motion, the Court and the parties must engage in this exercise on a document-by-document basis for each confidential document files under seal to date, and for each confidential document filed in the future as well. The regime G2 proposes represents a significant and unnecessary burden for the parties and for the Court, and, as set forth in detail herein, is unsupported by the relevant authorities.

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Argument

A. G2's Reliance On A First Amendment Right of Access to Confidential Documents is Misguided.

The Court should deny G2's motion because neither the United States Supreme Court nor the Tenth Circuit Court of Appeals has held that the First Amendment guarantees public access to all court documents, much less the right to access confidential documents produced in complex litigation pursuant to a duly-entered protective order. More important, even if the First Amendment did apply to confidential documents filed under seal in this circuit, G2's motion fails becaue such documents have not historically been open to inspection by the public, and because G2 fails to show that public access traditionally has played a "significant positive role" in resolving discovery disputes and dispositive motions pursuant to which certain documents may have been filed under seal with the Court.

In its motion, G2 concedes, as it must, that although the First Amendment generally guarantees public access to judicial proceedings, neither the Supreme Court nor the Tenth Circuit Court of Appeals holds that a First Amendment right of access exists with respect to judicial records. Instead, G2 (correctly) assers only that "the Tenth Circuit has assumed that there could be a right of access under the First Amendment to such materials," relying on two criminal cases. (Mem. Supp. of Motion to Intervene ("Motion to Intervene") at 3, n.3 (emphasis added).) The decisions, United States v. McVeigh, 119 F.3d 806, 813-15 (10th Cir. 1997), and United States v. Gonzales, 150 F.3d 1246, 1255-56 (10th Cir. 1998), easily distinguishable on their facts from this complex civil lawsuit, both expressly declined to hold that a First Amendment right of access to judicial documents exists. See McVeigh, 119 F.3d at 806 (stating that "we have not

2

Even if this Court were to apply the test which McVeigh declined to establish, G2 still cannot show that the confidential documents filed under seal here are subject to a First Amendment right of access, much less one which obligates the parties to make a showing of "specific competitive harm" on a document-by-document basis, as G2 contends. (Motion to Intervene at 5 (emphasis in original).) In McVeigh, the Tenth Circuit stated, without deciding, that a two-part "experience and logic" test could be used to determine whether a public right of access to judicial documents exists. The test asks "1) whether the document is one which has historically been open to inspection by the press and public; and 2) whether public access plays a significant positive role in the functioning of the particular process in question." McVeigh, 119 F.3d at 812 (internal citation and quotation marks omitted). As G2's motion itself demonstrates, neither inquiry can be answered affirmatively here.

First, contrary to G2's assertions, confidential documents sealed pursuant to a valid protective order have not "historically been open to inspection by the press and public." G2 has not demonstrated a tradition of public access to these kinds of documents, and no such tradition

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Second, rather than playing a "significant positive role" in the functioning of the particular process in question, modifying the Protective Order as G2 proposes would hinder the efficient resolution of this case by requiring the parties to make a document-by-document showing of "specific competitive harm" before any such document may be used in the litigation. Such a principle -- and its corollary, the parties' subsequent dependence on the Court for the resolution of confidentiality disputes, one motion and one document at a time -- would undermine the Court's ability to facilitate "full disclosure in discovery without fear of public access to sensitive information." United Nuclear Corp. v. Cranford Ins. Co., 905 F2d 1424, 1427 (10th Cir. 1990); see also Gillard v. Boulder Valley Sch. Dist. Re-2, 196 F.R.D. 382, 386 (D. Colo. 2000).

Rather than explaining the public's "significant" positive role in the resolution of the discovery, summary judgment, and other pre-trial procedural motions at issue in this case, pursuant to which the parties have submitted confidential documents under seal as necessary, G2 instead asserts that this case is both "important" and of "broad public interest," and that these facts require the parties to show (and the Court to find) "specific competetive harm" with respect to each document filed under seal. Under G2's analysis, a third-party need only assert that a case is, in its judgment, "important" in order to require the parties and the Court to undertake

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B. The Protective Order Entered In This Case Properly Balances Any Common Law Right of Access With the Parties' Interest in Maintaining Confidentiality.

While courts have recognized a common law right of access to court documents generally, "the right is not absolute. All courts have supervisory powers over their own records and files." Hickey, 767 F.2d at 708 (citing Nixon v. Warner Communications, Inc., 435 U.S. 589, 598 (1978)). Moreover, "the decision as to access is one best left to the sound discretion of the trial court, a discretion to be exercised in light of the relevant facts and circumstances of the particular case." Nixon, 435 U.S. at 597-99; Hickey , 767 F.2d at 708. Moreover, in a case relied upon by G2, this Court similarly recognized that "[c]ourts have supervisory powers over their own files and records. . . and have discretion to seal court documents 'if the public's right of access is outweighed by competing interests.'" Huntsman-Christensen Corp. v. Entrada Industries, Inc., 639 F. Supp. 733, 736 (D. Utah 1986) (citations omitted). The Protective Order here -- and the parties' confidentiality designations thereunder -- clearly satisfies this requirement.

As grounds for its entry, the Protective Order expressly recognizes and seeks to balance "the public's interest in public access to the courts" with "the parties' interest in maintaining the confidentiality of sensitive information," and the need for efficient management of the lawsuit. (Protective Order at 2.) In order to accommodate these competing interests, the Protective Order defines "Confidential Information" as

information or DOCUMENTS or other materials that the DISCLOSING PARTY in good faith believes ins not publicly known that would be valuable to third parties, including but not limited to the DISCLOSING PARTY'S actual and potential competitors, and that the DISCLOSING PARTY would not

5

normally reveal, and has not revealed, to third parties without an agreement to maintain it in confidence.

(Id. at 3.) A "confidential" designation obligates the non-disclosing party who wishes to use the document in a submission to the Court to file it under seal. (Id. at 9.) The Protective Order also provides that "[a]t any time" a party may challenge a confidentiality designation that the party in good faith believes should not have been so designated, and, in the event of such a dispute, places the burden of proof on the disclosing party to show that the document was properly designated.(Id. at 10.) Despite the fact that IBM and SCO have each reviewed documents designated by the other as confidential, neither party has filed a motion seeking to remove the designation from any confidential document. G2's objection, in contrast, necessarily is based on speculation.

As a result of the foregoing, and contrary to G2's claims, the Protective Order does not permit confidentiality designations solely for the purpose of avoiding harm to the parties' reputations. Instead, it appropriately requires that confidential information not be publicly known, and that it must be "valuable to third parties, including . . . competitors." (Id. at 3.) To qualify for protection, confidential information also must be of a sort which the disclosing party would not normally reveal to a third party without a confidentiality agreement. (Id.) Under these circumstances, any public right of access is clearly outweighed by the parties' competing interest in preventing the disclosure of information that would benefit their competitors and that they would not ordinarily reveal without an agreement to maintain its confidentiality.

Moreover, although G2 complains that the documents placed under seal were designated as confidential "based on the unilateral decision of the parties" (Motion to Intervene at 7), stipulated protective orders of this kind in fact are "routine" in cases involving large volumes of documents. United Nuclear , 905 F.2d at 1427 (citation omitted). Such "blanket" protective orders -- which allow the parties the ability to designate documents as confidential, subject to objection by the opposing party -- "serve the interests fo a just, speedy and less

6

C. The Caselaw G2 Cites Does Not Support the Relief Sought In its Motion.

Relying solely on Grundberg v. Upjohn Co., 137 F.R.D. 372 (D. Utah 1991) ("Grundberg I"), G2 claims that the parties bear the burden of proving that each sealed document -- indeed each "portion" of a sealed document -- is "actually confidential" and should not be kept under seal absent a showing that publication of the material would cause the producing party "specific competitive harm," even where neither party challenges the other's confidentiality designations. (Motion to Intervene at 5, 7-8.) Neither GRundberg II, issued later in the same case, requires such a result.

In Grundberg I , plaintiffs filed a products liability action against The Upjohn Co. ("Upjohn") relating to the drug Halcion. The parties initially stipulated to the entry of a protective order. Thereafter, plaintiff filed a motion challenging Upjohn's confidentiality designations as to seven categories of documents produced in discovery, including documents marked by Upjohn as confidential that had been filed with the Food and Drug Administration, certain published articles, and correspondence received from third parties. 137 F.R.D. at a375-76, 392. In response to plaintiffs' motion challenging Upjohn's confidentiality designations, Upjohn registered a "collective works" copyright for the documents covered by the plaintiffs' motion and filed a copyright infringement action against plaintiffs and their lawyers seeking to defeat the motion and enjoin their use of the documents in the litigation. Id. at 377, 378. In rejecting Upjohn's copyright infringement claims on the merits and granting plaintiffs' motion, the district

7

But Grundberg I did not impose a "burden of showing that each particular document, or portion of a document, filed with the court should be put or remain under seal." (Motion to Intervene at 7 (emphasis in original).) to the contrary, the district court only required Upjohbnn to defend the confidentiality designations as to eight broad categories of documents -- and nowhere required review on a document-by-document, much less each "portion" of a document, basis, as G2 insists. 137 F.R.D. at 375-77. Moreover, while the court ultimately agreed that Upjohn could not justify its designations in the face of the plaintiffs' specific challenges, the court's modification of the protective order actually precluded the relief G2 seeks here -- release of the challenged documents prior to trial. Instead, while rejecting Upjohn's arguments in some detail, the district court nevertheless ordered that the confidentiality designations not be lifted from the documents until such time as the documents were admitted into evidence at trial. Grundberg I , 137 F.R.D. at 396.

While Grundberg I features prominently in G2's motion, G2 decllines to cite Grundberg II , 140 F.R.D. 459. After the conclusion of the product liability and copyright actions various non-parties with interests in collateral litigation intervened, seeking modification of the protective order to gain access to discovery produced and lodged with the court under seal. Id. at

8

D. Even Where Confidentiality Designations Are Validly Challenged, Any Presumption of Access Will Vary Depending on the Documents' Role in the Adjudicatory Process

Before weighing the parties' interest in confidentiality against the public right of access, courts first determine the role played by the confidential documents at issue in the adjudicatory process. 6 MOORE'S FEDERAL PRACTICE § 26.104[2] (Matthew Bender 3d ed.) Once the court decides how strong a presumption of access a document deserves in light of its role, it then will balance the weight of that presumption against the parties' interest in confidentiality to determine whether a document must be unsealed. Id.

At one end of this spectrum, courts generally find that no public entitlement exists to "[d]ocuments that play no role in the performance of judicial functions, such as most materials exchanged during discovery" -- even where such documents are submitted to the court with discovery motions. Id.;Grundberg II, 140 F.R.D. at 466 (no right of access by non-parties to pretrial discovery materials whether retained by the parties or filed with the court under seal); Chicago Tribune Co. v. Bridgestone/Firestone, Inc., 263 F.3d 1304, 1312 (11th Cir. 2001) ("material filed with discovery motions is not subject to the common-law right of access . . . . This means that the [defendant's] documents filed in connection with motions to compel discovery are not subject to the common-law right of access." (internal citation omitted)): see also Seattle Times Co. v. Rhinehart, 467 U.S. 20, 33 (1984) (stating that depositions and interrogatories are "not public components of a civil trial" and are "conducted in private as a matter of modern practice.") At the other, an understandably strong presumption of public

9

As set forth in detail above, G2's motion would thrust upon the parties the burden of making a particularized showing not only as to each document filed under seal in this case, but as to each portion of each document. (Motion to Intervene at 8.) As a result, if the Court were to grant G2's motion, the parties would be required to submit substantial additional briefing as to the confidential nature of every document filed or to be filed under seal prior to in camera review. For all the reasons set forth above, IBM does not understand the parties and the Court to be obligated to shoulder this burden.

Given that G2's motion anticipates additional briefing and review by the Court if granted, IBM does not undertake to make the particularized showing on which G2 insists at this time. ³ However, IBM submits that the documents filed under seal in this case fall into one of three categories and should be addressed as follows:

First, as set forth above, no presumption of public access exists with respect to discovery documents and motions. Because such motions do not implicate the adjudicative process, and because discovery documents themselves are not subject to a right of public access, these motions, including related memoranda, declarations, and exhibits should remain under seal, without further need for briefing or argument. Grundberg II , 140 F.R.D. at 466; Chicago Tribune Co., 263 F.3d at 1312-13.

10

11

Conclusion

For the foregoing reasons, IBM respectfully requests that the Court deny G2's Motion to Intervene and to Unseal Court's File.

DATED this 20th day of January, 2005.

SNELL & WILMER L.L.P.

__[signature]___
Alan L. Sullivan
Todd M. Shaugnessy
Amy F. Sorenson

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

Attorneys for Defendant/Counterclaim-Plaintiff
International Business Machines Corporation

Of counsel:

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

Attorneys for Defendant/Counterclaim-Plaintiff
International Business Machines Corporation

¹ Yesterday, IBM received notice that CNET Networks, Inc. ("CNET") and Forbes, Inc. ("Forbes") joined G2's motion, incorporating G2's arguments by reference in their joinder.

² In fact, in a companion opinion issued after the Grundberg v. Upjohn decision relied upon by G2 extensively elsewhere in its motion, the District of Utah likewise made clear that "'[t]he Supreme Court never has found a First Amendment right of access to civil proceedings or the court file in a civil proceeding.'" Grundberg v. Upjohn, 140 F.R.D. 459, 466 (D. Utah 1991) ("Grundberg II") (quoting Webster Groves Sch. Dist. v. Pulitzer Publ. Co., 898 F.2d 1371, 1377 (8th Cir. 1990).) G2 declines to cite Grundberg II anywhere in its motion.

³ Should the COurt grant G2's motion, IBM of necessity will submit additional briefing addressing the particular documents at issue in detail in advancd of any in camera review.

⁴ In addition, nine boxes of exhibits to IBM's Motion for Partial Summary Judgment on its Counterclaim for Copyright Infringement (8th Counterclaim) consist of Linux source code, which is and should be publicly available. However, SCO designated as confidential Linux source code produced by it in discovery, which IBM submitted with its motion. For this reason, these nine boxes of exhibits were filed under seal. (Docket No. 243.)

CERTIFICATE OF SERVICE

I hereby certify that on the 29th day of January, 2005, a true and correct copy of IBM's MEMORANDUM IN OPPOSITION TO G2'S MOTION TO INTERVENE AND TO UNSEAL COURT'S FILE was served on the following by U.S. Mail, postage prepaid:

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

Michael Patrick O'Brien
Andrew H. Stone
Jones, Waldo, Holbook & McDonough
[address]

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

Robert Silver
Edward Normand
Sean Eskovitz
BOIES, SCHILLER & FLEXNER LLP
[address]

(signature)
Amy F. Sorenson