Here's IBM'S Redacted Reply Memorandum in Further Support of its Motion for Summary Judgment on its Claim for Copyright Infringement (IBM's Eighth Counterclaim) [PDF], as text, thanks to the tireless Steve Martin. It references Addendum A (where IBM lists all the undisputed facts it offered that SCO failed to dispute) and Addendum B [PDFs], (IBM's objections to the evidence on which SCO relies). The addenda are fascinating indeed, particularly if you want to watch what lawyers do in detail.
In this motion, IBM turns the tables and calls SCO a "blatant infringer" of IBM's copyrighted works, after SCO lost its GPL license by violating/repudiating the GPL. What? SCO is guilty of violating IBM's IP? Why, yes. Yes, it is, IBM argues. The previous article is the transcript of the court hearing on this motion, and because oral arguments are limited as to time, you'll find a much deeper level of argument here in this document. This is the filing where IBM thoroughly answers SCO regarding the GPL and the SCOsource license SCO invented and why they conflict. SCO has come up with its very own understanding of what the GPL language means. Why? In my view, because otherwise it loses the motion.
************************************* 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 REDACTED REPLY
MEMORANDUM IN FURTHER
SUPPORT OF ITS MOTION FOR
SUMMARY JUDGMENT ON ITS CLAIM
FOR COPYRIGHT INFRINGEMENT
(IBM'S EIGHTH COUNTERCLAIM)
(ORAL ARGUMENT REQUESTED)
Civil No. 2:03-CV-00294 DAK
Honorable Dale A. Kimball
Magistrate Judge Brooke C. Wells
|
1
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)
Roger G. Brooks (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 REPLY MEMORANDUM IN
FURTHER SUPPORT OF ITS MOTION FOR
SUMMARY JUDGMENT ON ITS CLAIM
FOR COPYRIGHT INFRINGEMENT (IBM'S
EIGHTH COUNTERCLAIM)
(ORAL ARGUMENT REQUESTED)
FILED UNDER SEAL PURSUANT TO 9/16/03
PROTECTIVE ORDER, DOCKET #38
Civil No. 2:03-CV0294 DAK
Honorable Dale A. Kimball
Magistrate Judge Brooke C. Wells
|
2
Table of Contents
Page |
Table of Authorities |
ii |
Preliminary Statement |
1 |
Statement of Undisputed Facts |
2 |
Argument |
3 |
I. |
IBM OWNS THE COPYRIGHTS TO THE IBM COPYRIGHTED WORKS |
3 |
II. |
SCO LACKS PERMISSION OR A LICENSE TO COPY OR DISTRIBUTE
THE IBM COPYRIGHTED WORKS |
5 |
III. |
SCO HAS COPIED AND DISTRIBUTED THE IBM COPYRIGHTED WORKS |
10 |
IV. |
IBM IS ENTITLED TO SUMMARY JUDGMENT THAT SCO IS LIABLE FOR
INFRINGEMENT OF THE IBM COPYRIGHTED WORKS |
11 |
V. |
IBM IS ENTITLED TO SUMMARY JUDGMENT GRANTING AN
INJUNCTION AGAINST FURTHER VIOLATIONS OF ITS COPYRIGHTS |
15 |
Conclusion |
18 |
3
Table of Authorities
Page(s) |
Cases |
Ashley Creek Phosphate Co. v. Chevron,
129 F. Supp. 2d 1299 (D. Utah 2000), aff'd in part, rev'd
in part, 315 F.3d 1245 (10th Cir. 2003) |
2 |
Autoskill, Inc. v. Nat'l Educ. Support Sys., Inc.,
994 F.2d 1476 (10th Cir. 1993) |
16 |
CBS Broad., Inc. v. EchoStar Comms. Corp.,
450 F.3d 505 (11th Cir. 2006) |
16 |
Citizens Financial Group, Inc. v. Citizens Nat'l Bank of
Evans City,
383 F.3d 110 (3d Cir. 2004) |
15 |
Cofield v. Ala. Public Serv. Comm'n,
936 F.2d 512 (1 lth Cir. 1991) |
12 |
Concrete Mach. Co. v. Classic Lawn Ornaments, Inc.,
843 F.2d 600 (1st Cir. 1988) |
12, 16 |
Country Kids `N City Slicks, Inc. v. Sheen,
77 F.3d 1280 (10th Cir. 1996) |
15 |
Fitzgerald Publ'g Co., Inc. v. Baylor Publ'g Co.,
Inc.,
807 F.2d 1110 (2d Cir. 1986) |
2, 11 |
Intel Corp. v. VIA Techs., Inc.,
319 F.3d 1357 (Fed. Cir. 2003) |
12 |
Jacob Maxwell, Inc. v. Veeck,
110 F.3d 749 (11th Cir. 1997) |
9 |
MCA Television Ltd. v. Public Interest Corp.,
171 F.3d 1265 (11th Cir. 1999) |
9 |
Palladium Music, Inc. v. EatSleepMusic, Inc.,,
398 F.3d 1193 (10th Cir. 2005) |
4, 5 |
Pinkham v. Sara Lee Corp.,
983 F.2d 824 (8th Cir. 1992) |
2, 11 |
Republic Molding Corp. v. B.W. Photo Utilities,
319 F.2d 347 (9th Cir. 1963) |
14-15 |
4
Table of Authorities
(continued)
Page(s) |
San Huan New Materials High Tech, Inc. v. Int'1 Trade
Comm'n,
161 F.3d 1347 (Fed. Cir. 1999) |
12 |
Silicon Image, Inc. v. Genesis Microchip Inc.,
395 F.3d 1358 (Fed. Cir. 2005) |
12 |
Wallace v. Free Software Found.,
No. 05-0618, 2006 WL 2038644 (S.D. Ind. Mar. 20, 2006) |
13 |
Wallace v. Int'l Bus. Mach. Corp.,
No. 06-2454, - F.3d -, slip op. (7th Cir. Oct. 26, 2006) |
13 |
Wallace v. Int'l Bus. Mach. Corp.,
No. 05-678, 2006 WL 1344055 (S.D. Ind. May 16, 2006) |
13, 17 |
Worthington v. Anderson,
386 F.3d 1314 (10th Cir. 2004) |
15 |
Young v. Dillon Companies, Inc.,
468 F.3d 1243 (10th Cir. 2006) |
4 |
Other |
4-13 Nimmer on Copyrights (2006) |
14 |
5
Defendant/Counterclaim-Plaintiff IBM respectfully submits this
memorandum in further support of its motion for summary judgment on
IBM's claim for copyright infringement (IBM's Eighth
Counterclaim).
Preliminary Statement
A one-time Linux company that sought to "unify UNIX with Linux",
SCO repudiated and breached the GNU General Public License ("GPL")
(SCO's only license to copy, modify and distribute Linux), turned
on its own Linux customers and former partners in the Linux
community, and sued IBM without evidence to support its claims.
Now, confronted with record evidence on IBM's counterclaim
establishing beyond doubt that SCO, when it embarked on its scheme
in 2003, infringed copyrights owned by IBM (among many others), SCO
presents to the Court an opposition memorandum filled with
inapposite facts and irrelevant legal citations that seek to
obfuscate its wrongdoing. Caught with its hand in the cookie jar,
SCO tries to change the subject.
Nonetheless, as IBM demonstrated in its opening brief and again
in its brief in opposition to SCO's own motion against this Eighth
IBM Counterclaim for copyright infringement, IBM is entitled to
summary judgment. First, IBM owns the IBM Copyrighted Works,
a point on which SCO proffers no contrary evidence. (See
Section I below.) Second, SCO has lacked permission to copy
or distribute the IBM Copyrighted Works since SCO repudiated and
then breached the only license it ever had to those works, the GPL.
SCO breached the GPL in material, indeed central, ways as early as
August 2003, and SCO's license automatically terminated upon its
GPL violations. (See Section II below.) Third, SCO
unequivocally admits, as it must, that it copied and distributed
the IBM Copyrighted Works after its license under the GPL
terminated. (See Section III below.) These indisputable
facts entitle IBM to summary judgment on its Eighth
6
Counterclaim for copyright infringement. (See Section IV
below.) IBM also is entitled to injunctive relief proscribing SCO
from further infringement. (See Section V below.)
Statement of Undisputed Facts
IBM's opening papers set out, supported by record evidence, 47
undisputed facts that entitle IBM to summary judgment on its Eighth
Counterclaim for copyright infringement.1 In response, SCO fails properly
to contest them, as described in Addendum A, which is incorporated
herein by reference. Although SCO purports to dispute nearly
three-quarters of these facts, SCO fails to do so with evidence of
record meeting the requirements of Fed. R. Civ. P. 56. Pursuant to
DUCivR 56-1(c), IBM's facts should therefore be deemed
admitted.
Rather than specifically controvert IBM's statement of facts,
SCO offers its own counter-statement of facts. However, a party
cannot avoid summary judgment based on a counterstatement of facts
that does not satisfy the requirement of DUCivR 56-1(c). See
Ashley Creek Phosphate Co. v. Chevron, 129 F. Supp. 2d 1299,
1303 n.2 (D. Utah 2000), aff'd in part, rev'd in part, 315
F.3d 1245 (10th Cir. 2003). SCO's counterstatement of alleged facts
does not meet IBM's facts and is comprised of alleged evidence that
is immaterial, inadmissible, or both.
In fact, as set forth in Addendum A, SCO's opposition is a
veritable Potemkin village, built of citations to irrelevant
evidence plainly designed to create the impression of a fact
dispute where none exists. For example, SCO provides narrative
discussions about why it copied and distributed IBM's
copyrights that are plainly irrelevant to this motion for summary
judgment of copyright infringement2:
7
(1) |
In response to IBM's assertion in its fact ¶ 37 that SCO
made Linux files, including the IBM Copyrighted Works, available to
the public until as recently as August 2006, SCO states that it
"overlooked" the fact that it was doing so. |
(2) |
In response to IBM's assertion in its fact ¶ 40 that SCO
continued to copy, distribute and sell the IBM Copyrighted Works as
part of SCO's Linux products even after SCO breached and repudiated
the GPL, SCO states that it did so because of "contractual
obligations" to its customers. |
IBM's objections to the evidence on which SCO relies are set out
in Addendum B, which is incorporated herein by reference. To
summarize, SCO's opposition depends almost entirely on the
recitation of irrelevant facts and hearsay statements that do not
meet the requirements of the Federal Rules.
Argument
I. IBM OWNS THE COPYRIGHTS TO THE IBM COPYRIGHTED
WORKS.
In its opening brief, IBM demonstrated its ownership of the
copyrights on the IBM Copyrighted Works with citation to specific,
indisputable record evidence, including an affidavit from an
employee with knowledge and the government-issued copyright
registrations themselves. (See IBM Copy. Br. ¶ 24; IBM
Exs. 73-104; IBM Ex. 167 ¶ 5.)3 In opposition, SCO does not even
attempt to controvert directly the fact of IBM's ownership.
Instead, SCO attempts to dodge the issue by misdirection.
SCO argues that "IBM's copyright in material in Linux is invalid
because Linux as a whole, including the works, is an infringing
derivative work of SCO's UNIX System V", and "an
8
infringing derivative work cannot be copyrighted". (Opp'n Br. at
26, 28.) But this is sleight of hand. Even if it were true that
novel parts of an infringing derivative work cannot be copyrighted,
SCO does not offer a shred of evidence — nothing at all
— indicating that even one of the sixteen works that are the
IBM Copyrighted Works is a "derivative work of SCO's UNIX System
V".4
Instead, SCO presents "evidence" (an untimely expert report by Dr.
Thomas Cargill and a few internal IBM documents) purportedly
showing that
SECTION REDACTED
Even if that were true (and it is not), Dr. Cargill's opinion
that
SECTION REDACTED
IBM does not allege infringement of Linux as whole; IBM alleges
and has established infringement of sixteen specific indisputably
original works on which IBM holds the copyright. The fact that IBM
contributed the works to Linux under the GPL does not make them any
less original.5
IBM has presented the certificates of registration from the U.S.
Copyright Office for the sixteen works at issue. (IBM Copy. Br.
¶ 24.) Those certificates constitute "prima facie evidence of
a valid copyright", and SCO "bears the burden to overcome the
presumption of validity". See Palladium Music, Inc. v.
EatSleepMusic, Inc_, 398 F.3d 1193, 1196 (10th Cir.
9
2005). To carry that burden, SCO "must do more than simply show
that there is some metaphysical doubt as to" the fact of IBM's
ownership of these copyrights. See id. (citation and
quotation marks omitted). Yet SCO proffers nothing other than
inapposite evidence allegedly suggesting that Linux as a whole
— because of purported "similarities in structure" between
Linux and UNIX — is an infringing derivative work.6 Accordingly, no
reasonable jury could find based on the record evidence that IBM
does not own the copyrights to the IBM Copyrighted Works.
Furthermore, the expert opinions of Dr. Cargill, SCO's chief
evidence on this point, should be disregarded by the Court for
three independent reasons: (1) Dr. Cargill's "evidence" regarding
Linux was not specifically disclosed in SCO's Final Disclosures, so
SCO is precluded from relying upon it (DJ Reply at 9-11); (2) Dr.
Cargill's opinion is inadmissible because it is based on flawed
legal premises (DJ Reply at 47-48, 53-55); and (3) Dr. Cargill's
declaration was not submitted until SCO's opposition to IBM's
present motion, long after the deadline for expert reports (AIX
Reply at 5 n.5).
II. SCO LACKS PERMISSION OR A LICENSE TO COPY OR DISTRIBUTE
THE IBM COPYRIGHTED WORKS.
As IBM also demonstrated in its opening brief — and in
opposition to SCO's motion on this counterclaim — SCO
repudiated and breached the GPL, blatantly and repeatedly, in its
attempts to license Linux on terms that violate the GPL. (IBM Copy.
Br. at 17-20; IBM Opp'n Br. at 21-27.) Because a violation of the
GPL automatically terminates a licensee's rights to material made
available under the GPL, SCO lost the only license it ever had to
the IBM Copyrighted Works when SCO violated the GPL. (IBM Opp'n Br.
at 21-27.) Indeed, IBM has
10
explained in detail in its opposition to SCO's motion on this
copyright counterclaim how the unambiguous language of the GPL
proscribes SCO's conduct, and how SCO's repudiation and breach of
the GPL resulted in the loss of SCO's license to the IBM
Copyrighted Works, and thus in SCO's infringement. (Id.) IBM
incorporates that discussion by reference herein. Nevertheless, SCO
makes six arguments in opposition to IBM's motion (all of which are
misguided), and so IBM addresses them briefly here, once again.
First, SCO argues that it "complied with all the GPL's
requirements and therefore was authorized, as a matter of law, to
distribute the works" because GPL "Section 1 expressly permits the
charging of fees for transfer of the software and for warranty
protection" and "[n]othing in the GPL ... suggests that other types
of fees are prohibited".7 (Opp'n Br. at 18.) Not so. The plain and
unambiguous language of the GPL forecloses SCO's argument. As IBM
has already explained, the overarching intent of the GPL is plainly
expressed in its Preamble, and that intent is specifically to
preclude a licensee such as SCO, which has benefited from a free
license from others, from turning around and imposing a license fee
on others. (IBM Opp'n Br. at 23-24.) The GPL "is intended to
guarantee your freedom to share and change free software-to make
sure the software is free for all its users", and the GPL protects
this freedom by imposing restrictions on the licensee "if you
distribute copies of the software, or if you modify it". (IBM Ex.
128, Preamble ¶¶ 1, 3.) The specific numbered sections of
the GPL implement this intent and make clear that GPL licensees
such as SCO may impose only certain enumerated fees and
restrictions on other GPL licensees, including limited fees for
"the physical act of transferring a
11
copy" of the Program and for "warranty protection" under Section
1. SCO violated the GPL by charging prohibited licensing fees for
Linux, imposing an "object code only" restriction on Linux
licensees (including, but not limited to, Linux licensees who
received Linux from SCO), and purporting to prohibit Linux
licensees (including, but not limited to, SCO's own customers) from
further sublicensing or distributing Linux.8 (See IBM Copy. Br. at
19-20 & ¶¶ 43-46; IBM Opp'n Br. ¶¶
23-24.)
SCO also theatrically suggests that the plain meaning of the GPL
is "dangerous". (Opp'n Br. at 18.) As IBM has previously explained,
however, SCO's argument that, in effect, it is "dangerous" to
interpret the GPL only by looking within its four corners and
considering each provision in relation to the others not only flies
in the face of the unambiguous language of the GPL and standard
rules of contract interpretation, but it also is not supported by
the cases on which SCO relies. (See IBM Opp'n Br. at 22
n.8.) In any event, the GPL is "dangerous" only to would-be
free-riders such as SCO.
Second, SCO argues that it did not repudiate the GPL because,
inter alia,
SECTION REDACTED
The assertion is both garbled and irrelevant; the question is
whether SCO did abide by it. As amply demonstrated in
12
IBM's opening brief, SCO did not. (See IBM Copy. Br. at
17-20 & ¶¶ 40-47; see also IBM Opp'n Br. at
25-27.)
Third, SCO argues that it did not breach the GPL because
"nothing in the GPL warrants that Linux is beyond the reach of
patents, copyrights or other intellectual property" and because
"Section 7 of the GPL expressly contemplates and warns of that
possibility". (Opp'n Br. at 24.) It may be true that Section 7
"contemplates" that other intellectual property (e.g.,
intellectual property held by non-licensees) may "reach" Linux, but
that in no way relieves GPL licensees of their obligations
under the GPL. Further, Section 7 makes clear that if a GPL
licensee such as SCO "cannot distribute so as to satisfy
simultaneously [its] obligations under this License and any other
pertinent obligations, then as a consequence [SCO] may not
distribute the Program at all". (IBM Ex. 128 § 7; IBM Ex. 129
§ 11.) Thus, SCO cannot both wield its purported intellectual
property rights in blatant breach of the GPL and remain licensed
under the GPL.9 (See also IBM Opp'n Br. at 26
n.14.)
Fourth, SCO argues that "even if [it] had somehow
repudiated or breached the GPL, neither the case law nor the GPL
supports the concept of retroactive termination". (Opp'n Br. at
25.) This is irrelevant; IBM has not argued for "retroactive
termination". Rather, SCO's rights automatically terminated —
prospectively — pursuant to GPL § 4 when SCO repudiated
and breached the GPL. (See IBM Ex. 128 § 4; IBM Opp'n
Br. at 28 & n.17.) As IBM has demonstrated elsewhere, the cases
cited by SCO are entirely inapposite (as IBM seeks no double
recovery), and in any case specifically recognize that use of the
copyrighted work absent or
13
outside the scope of the license would have supported a claim
for copyright damages.10 (See IBM Opp'n Br. at 28 &
n.17.)
Fifth, SCO argues that since Section 4 of the GPL
"effectively ratifies sublicenses granted prior to the alleged
breach, IBM cannot complain that the initial grant was
unauthorized". (Opp'n Br. at 25.) Section 4 does no such thing.
Section 4 simply provides that SCO's breaches of its obligations
under the GPL do not deprive its sublicensees of their own
rights under the GPL. This follows from the fact that, by operation
of the unambiguous language of the GPL, SCO's Linux "licensees"
receive their license to Linux and the IBM Copyrighted Works
from IBM itself and others who originally licensed Linux and
its component parts under the GPL: "Each time you redistribute the
Program (or any work based in the Program), the recipient
automatically receives a license from the original licensor to
copy, distribute or modify the Program subject to these terms and
conditions." (IBM Ex. 128 § 6 (emphasis added); see IBM
Ex. 129 § 10.)
Sixth, and last, SCO argues that it did not breach the
GPL because "SCO entered into a UNIX License only with parties who
had previously obtained Linux from a third party", not with Linux
licensees who received Linux from SCO. (Opp'n Br. at 24.) SCO is
wrong on two counts. First, as demonstrated previously, SCO's
levying of license fees on Linux users violated SCO's obligations
under the GPL, regardless of how those Linux users obtained their
Linux licenses. Second, through an agreement called the
"Intellectual Property Compliance License Agreement for Linux", SCO
purported to impose on its own Linux licensees the same
14
restrictions it sought to impose on the rest of the Linux-using
world. (IBM Copy. Br. ¶ 45.) SCO limited its Linux licensees
to only the object code (i.e., machine-readable and
non-source code) format, and prohibited them from further
sublicensing or distributing Linux. (Id.) SCO cannot dispute
that it attempted to impose these restrictions on its own customers
and the entire Linux-using world. Those restrictions violated the
GPL.11
III. SCO HAS COPIED AND DISTRIBUTED THE IBM COPYRIGHTED
WORKS.
In its opening brief, and again in its opposition to SCO's
motion against this Eighth Counterclaim, IBM cited record evidence
establishing beyond doubt that SCO copied and distributed the IBM
Copyrighted Works after SCO repudiated and breached the GPL.
(See IBM Copy. Br. at 20 & ¶¶ 30-39; IBM Opp'n
Br. at 18-19, 30 & ¶ 27.) SCO does not, and cannot,
controvert this fact. Indeed, SCO admits, as it must, that it
continued to copy and distribute the IBM Copyrighted Works after
SCO's license automatically terminated. As SCO explains: "SCO,
however, owed obligations to users who had already purchased SCO's
Linux products .... Accordingly, after May 14, 2003, SCO made a
limited number of sales to existing customers pursuant to its
contractual obligations", and SCO even "recognized revenue for a
negligible number of Linux sales after August 5, 2003, pursuant to
existing contractual obligations with Linux customers". (Opp'n Br.
¶¶ 37-38 & n.3.) Wholly apart from the other evidence
adduced by IBM, this admission establishes beyond question that SCO
copied and distributed the IBM Copyrighted Works after its license
to do so automatically terminated. Moreover, as an excuse, SCO's
claim that it "had to" make infringing copies of the IBM
15
Copyrighted Works in order to fulfill its own contractual
obligations to its customers is utterly irrelevant. See
Pinkham v. Sara Lee Corp., 983 F.2d 824, 829 (8th Cir. 1992)
(explaining that "[t]he defendant's intent is simply not
relevant"); Fitzgerald Publ'g Co., Inc. v. Baylor Publ'g Co.,
Inc., 807 F.2d 1110, 1113 (2d Cir. 1986) ("Even an innocent
infringer is liable for infringement.").
IV. IBM IS ENTITLED TO SUMMARY JUDGMENT THAT SCO IS LIABLE
FOR INFRINGEMENT OF THE IBM COPYRIGHTED WORKS.
IBM's opening brief explained that because the undisputed facts
establish that IBM holds the copyrights in the IBM Copyrighted
Works, and because SCO's rights to copy and distribute those works
terminated automatically upon SCO's repudiation and breach of the
GPL, SCO infringed IBM's copyrights through its continued
distribution of its commercial Linux products and its use of the
IBM Copyrighted Works in SCO's own internal development and support
work. (See IBM Copy. Br. at 20-21.)
Confronted with the inexorable conclusion following from these
undisputed facts, SCO offers three reasons, each without merit, why
it cannot be liable for copyright infringement notwithstanding its
copying and distributing the IBM Copyrighted Works without a
license.
First, SCO argues that "the GPL should not be read to
interfere with SCO's right to enforce its own intellectual property
rights" because "nothing in the GPL expressly forbids a party from
licensing its own software or entering into settlements to resolve
potential infringement of such rights", and "public policy" favors
protecting intellectual property and encourages settlements. (Opp'n
Br. at 28-29.) "Public policy" does not favor SCO's conduct. As IBM
has previously explained in response to this argument of SCO's (see
IBM Opp'n Br. at 30-31), "protecting intellectual property" in no
way weighs against letting intellectual property owners such as IBM
license their property to all at no charge subject to terms such as
those
16
provided by the GPL, for the purpose of promoting Free Software
— any more than it precludes patent holders from permitting
industry participants to practice their inventions on a
royalty-free basis, subject to restrictions, for the purpose of
promoting industry standards.12 Moreover, Section 7 of the GPL, which
SCO only selectively and misleadingly quotes in its brief,
expressly provides that "intellectual property" rights do not
permit a GPL licensee such as SCO to ignore the conditions of its
GPL license. (See supra note 8 & accompanying
text.)
Nor does the public policy favoring "settlements" empower SCO to
create an artificial dispute, and then "settle" that dispute by
charging license fees and imposing restrictions in violation of the
GPL. Public policy certainly does not favor all
"settlements". See, e.g., Cofield v. Ala. Public Service
Comm'n, 936 F.2d 512, 516 (11th Cir. 1991) (affirming district
court dismissal of suit by pro se litigant found to be "a
con-artist who sought to use the legal system to extort settlements
from unsuspecting parties").
Second, SCO argues that "the GPL should not be read to
allow a competitor to regulate what may be charged for an
intellectual property license", and states that if it were so read,
the GPL would be "per se illegal under the antitrust law". (Opp'n
Br. at 29.) The Seventh Circuit recently rejected SCO's position
and concluded: "The GPL and open-source software have
17
nothing to fear from the antitrust laws". Wallace v. Int'l
Bus. Mach. Corp., 467 F.3d 1104, 1108 (7th Cir. 2006)
(rejecting arguments that the GPL restrains trade and constitutes
illegal "price fixing"). The only other courts in the United States
that have spoken to the competitive implications of the GPL,
including the district court affirmed in Wallace, similarly
have rejected SCO's position. Those courts concluded that the GPL
"encourages, rather than discourages, free competition" and
benefits consumers. Wallace v. Free Software Found., No.
05-0618, 2006 WL 2038644, at * 3 (S.D. Ind. Mar. 20, 2006) (IBM
Copy. Br. Ex. A); see Wallace v. Int'l Bus. Mach.
Corp., No. 05-678, 2006 WL 1344055, at * 2 (S.D. Ind. May 16,
2006) (IBM Copy. Br. Ex. B). Moreover, SCO cites no evidence
— expert or otherwise — that would prevent the entry of
summary judgment in IBM's favor on this basis. (See also IBM
Opp'n Br. at 31-32.)
Third, SCO argues that "IBM's motion also fails for
unclean hands", pleading that "SCO determined to offer its UNIX
license, beginning in August 2003, because IBM and others had
misappropriated SCO's proprietary source code into Linux", and
separately accusing IBM of "obtain[ing] evidence by improper
means". (Opp'n Br. at 30-31 (emphasis omitted)) But SCO's
incantation of "unclean hands" does nothing to solve its
evidentiary problems, or magically remove the impediment of the law
to its argument. As IBM has detailed elsewhere, SCO offers no
evidence that IBM "misappropriated" anything. (See IBM DJ
Br. ¶¶ 146-57, 170-78, 192-94.) Accordingly, there is no
evidentiary support for the proposition that SCO was compelled to
violate the GPL because of any IBM action. SCO's "IBM made me do
it" defense wholly lacks evidentiary foundation.13
18
With respect to the alleged "hacking", SCO attempts to muddy the
water with an issue not implicated by the present motion. The
accusation is without substance. There is nothing unfair about an
IBM employee seeking to determine from publicly available sources
whether SCO continued to copy and distribute the IBM Copyrighted
Works after SCO publicly and repeatedly repudiated and breached the
GPL, thereby losing its license to those works. As IBM's employee
testified, there was no "hacking". (IBM Ex. 639 at 16-17.) IBM
reasonably believed that the information sought would be publicly
available, and that any password required was for access to
non-public information, not Linux code. IBM took no steps to
circumvent any confidentiality or security measures. (IBM Ex. 639
at 16-18.) But for purposes of the present motion, the relevant
point is that, although SCO would have the Court believe otherwise,
IBM does not cite or rely on any evidence on this motion obtained
through the purported "hacking". SCO does not fight the evidence
IBM actually does offer (which shows SCO's clear infringement of
IBM's copyrights); SCO fights the evidence it apparently wishes IBM
had offered (even though that evidence also shows SCO's clear
infringement of IBM copyrights).
Furthermore, SCO is simply wrong regarding the legal
significance of what it appears to consider a "gotcha". The single
incident that SCO identifies as "unclean" could not justify
foreclosing IBM's right to enforce its copyrights against SCO, a
blatant infringer. The defense of unclean hands is "recognized only
rarely" in copyright actions. 4-13 Nimmer on Copyrights
§ 13.09 (2006). Indeed, even if it were true that IBM
misappropriated SCO-owned code (which it did not), that fact would
not mean that SCO receives a free pass on its own copyright
infringement. In determining whether a plaintiff's suit is barred
by unclean hands, courts "weigh the substance of the right asserted
by plaintiff against the transgression which, it is contended,
19
serves to foreclose that right". Republic Molding Corp. v.
B.W. Photo Utilities, 319 F.2d 347, 350 (9th Cir. 1963);
see Citizens Fin. Group, Inc. v. Citizens Nat'l Bank of
Evans City, 383 F.3d 110, 129 (3d Cir. 2004) (quoting
Republic); see also Worthington v. Anderson,
386 F.3d 1314, 1320 n.6 (10th Cir. 2004) (citing
Republic but not reaching issue because plaintiff "did not
argue for such a weighing"). SCO's blatant and repeated violations
of the GPL have resulted in SCO's infringing not just IBM's
copyrights, but also the copyrights of everyone who contributed
original source code to Linux under the GPL. Therefore, equity does
not favor insulating SCO's systematic misconduct from redress.
SCO's "two wrongs make a right" argument is untenable as a matter
of law and common sense.
V. IBM IS ENTITLED TO SUMMARY JUDGMENT GRANTING AN INJUNCTION
AGAINST FURTHER VIOLATIONS OF ITS COPYRIGHTS.
Finally, IBM demonstrated in its opening brief that it is
entitled to injunctive relief to ensure that SCO does not further
violate its copyrights. SCO argues that IBM cannot satisfy the
requisite elements for a permanent injunction.
First, with respect to actual success on the merits, SCO
argues that IBM cannot establish success on the merits because "SCO
has always complied with the GPL". (Opp'n Br. at 33.) Enough has
been said on that topic.
Second, with respect to irreparable harm, SCO argues that
it was permitted to continue to use or distribute Linux because "it
has fully complied with, and has not repudiated or breached the
GPL", and "SCO has no 'existing' Linux customers". (Opp'n Br. at
33-34.) But SCO ignores IBM's argument: SCO's continued copying of
IBM Copyrighted Works — as recently as August of this year
— demonstrates a likelihood that SCO will continue to breach
the GPL and infringe IBM's copyrights if given the opportunity to
do so, and where the wrong is copyright infringement, irreparable
harm absent an injunction is presumed. See Country Kids
'N
20
City Slicks, Inc. v. Sheen, 77 F.3d 1280, 1288-89 (10th
Cir. 1996) (presuming irreparable harm at preliminary injunction
stage); see also Concrete Mach. Co. v. Classic Lawn
Ornaments, Inc., 843 F.2d 600, 611 (1st Cir. 1988) (same);
CBS Broad., Inc. v. EchoStar Comms. Corp., 450 F.3d 505, 517
n.25 (11th Cir. 2006) (presuming irreparable harm at permanent
injunction stage); (IBM Ex. 215 ¶ 100; IBM Ex. 226
¶¶ 13-16).
Third, SCO states, without analysis, that "there is no
threat of injury to IBM". (Opp'n Br. at 34.) SCO simply ignores the
required balancing of the harms, though the law is clear: "[T]he
potential injury to an allegedly infringing party caused by an
injunction merits little equitable consideration and is
insufficient to outweigh the continued wrongful infringement".
Autoskill Inc. v. Nat'l Educ. Support Sys., Inc., 994 F.2d
1476,1498 (10th Cir. 1993).
Fourth, SCO argues that "no public interest is at issue
where SCO has not infringed, and does not threaten to infringe,
IBM's alleged copyrights". To the extent SCO's point is that it is
innocent, that again has been amply disproved. Further, the
injunction, if issued, will help — not hurt — the
public interest.
In copyright cases, the public interest factor "normally weighs
in favor of issuance of an injunction because the public interest
is the interest in upholding copyright protections"
(Autoskill, 994 F.2d at 1499), and in the present case there
is the added public interest in protecting the ability of copyright
owners to offer a license to their copyrighted works at no charge
to the general public under the GPL. That is, it is not just the
copyright itself, but the integrity of the open source
collaborative software development model presented and protected by
the GPL that warrants an injunction against SCO. The public
interest factor, therefore, weighs heavily in favor of the issuance
of an injunction because an injunction will (1) uphold copyright
protections (see id.), and (2) protect the public
interest in the GPL and open source
21
software development, cf. Wallace v. Free Software
Foundation, No. 05-0618, 2006 WL 2038644, at * 3 (S.D. Ind.
Mar. 20, 2006) (noting benefits to consumers of GPL); Wallace v.
Int'l Bus. Mach. Corp., No. 05-678, 2006 WL 1344055, at * 2
(S.D. Ind. May 16, 2006) (same). (See also IBM Opp'n Br. at
35.)
22
Conclusion
For the foregoing reasons, IBM's motion for partial summary
judgment on its Eighth Counterclaim should be granted.
DATED this 12th day of January, 2007.
SNELL & WILMER L.L.P.
(signature)
Alan L. Sullivan
Todd M. Shaughnessy
Amy F. Sorenson
CRAVATH, SWAINE & MOORS LLP
Evan R. Chesler
Roger G. Brooks
David R. Marriott
Of Counsel:
INTERNATIONAL BUSINESS MACHINES CORPORATION
Alec S. Berman
[address]
[phone]
Attorneys for Defendant/Counterclaim-Plaintiff
International
Business Machines Corporation
23
CERTIFICATE OF SERVICE
I hereby certify that on the 12th day of January, 2007, a true
and correct copy of the foregoing was hand delivered to the
following:
Brent O. Hatch
Mark F. James
HATCH, JAMES & DODGE, P.C.
[address]
24
CERTIFICATE OF SERVICE
I hereby certify that on the 13th day of March, 2007, a true and
correct copy of the foregoing was electronically filed with the
Clerk of the Court and delivered by CM/ECF system to the
following:
Brent O. Hatch
Mark F. James
HATCH, JAMES & DODGE, P.C.
[address]
Robert Silver
Edward Normand
BOIES, SCHILLER & FLEXNER LLP
[address]
Stephen N. Zack
Mark J. Heise
BOIES, SCHILLER & FLEXNER LLP
[address]
/s/ Amy F. Sorenson
25
INDEX TO ADDENDA
Addendum A: |
IBM's Undisputed Facts: IBM Copyright Brief |
Addendum B: |
IBM's Objections to SCO's Alleged Evidence |
26
-
These facts also are set out in opposition to SCO's motion for
summary judgment on IBM's Sixth, Seventh and Eighth
Counterclaims.
(Referenced here)
-
See Pinkham v. Sara Lee Corp., 983 F.2d 824, 829
(8th Cir. 1992) (explaining that "the defendant's intent is simply
not relevant"); Fitzgerald Publ'g Co., Inc. v. Baylor Publ'g
Co., Inc., 807 F.2d 1110, 1113 (2d Cir. 1986) ("Even an
innocent infringer is liable for infringement.").
(Referenced here)
-
Terms are defined and used herein as they were in IBM's opening
brief. In addition, cites to "IBM Ex. _" refer to the declarations
and documents appended to the Declarations of Todd M. Shaughnessy,
dated September 25, 2006, November 11, 2006, and January 12, 2007,
the Supplemental Declaration of Todd M. Shaughnessy, dated
September 25, 2006, and the Second Supplemental Declaration of Todd
M. Shaughnessy, dated September 29, 2006. IBM herein refers to its
Memorandum in Support of Its Motion for Summary Judgment on Its
Claim for Copyright Infringement (IBM's Eighth Counterclaim) as
"IBM Copy. Br.", SCO's Memorandum in Opposition to IBM's Motion for
Summary Judgment on Its Claim for Copyright Infringement (IBM's
Eighth Counterclaim) as "Opp'n Br." and IBM's Memorandum in
Opposition to SCO's Motion for Summary Judgment on IBM's Sixth,
Seventh and Eighth Counterclaims as "IBM Opp'n Br.".
(Referenced here)
-
Only one IBM Copyrighted Work, JFS, is even among the
technologies allegedly improperly disclosed by IBM. SCO alleges
that disclosure is improper because IBM breached a contract,
however, and SCO's only evidence that JFS is a derivative of
SCO-owned code comes from the expert report of Dr. Evan Ivie, whose
analysis wrongly overlooks the fact that FS is derived from the
OS/2 operating system, not AIX, and that IBM owns copyrights in the
IFS material. (AIX Reply at 8-9.)
(Referenced here)
-
Moreover, almost none of the "evidence" SCO cites for this
proposition is even admissible. SCO Exhibits 328, 339, 340 and 334
each is or contains hearsay statements (and sometimes contains
double hearsay statements). (Opp'n Br. ¶¶ 42-46.) Such
material may not be considered on summary judgment. See
Young v. Dillon Cos., Inc., 468 F.3d 1243, 1252 (10th Cir.
2006).
(Referenced here)
-
In Palladium, the sole case cited by SCO on this point,
the defendants' evidence was very different in nature; in that
case, the defendants "presented evidence that the sound
recordings [plaintiff] had registered are based upon
preexisting musical compositions". Palladium, 398 F.3d at
1197 (emphasis added). SCO presents no evidence that the
Copyrighted Works that IBM has registered are based upon
preexisting materials of any kind, let alone materials owned by
SCO.
(Referenced here)
-
SCO also discusses GPL Section 3, a section that is, quite
frankly, irrelevant. Section 3 provides that a GPL licensee such as
SCO "may copy or distribute the Program (or a work based on it,
under Section 2) in object code or executable form under the terms
of Sections 1 and 2". (IBM Ex. 128 § 3.) SCO's compliance with
one section does not absolve it of violations of other sections.
Moreover, SCO also breached Section 3. GPL Section 3 is subject to
GPL Sections 1 and 2. Because SCO violated Section 2, it could not
have complied with Section 3.
(Referenced here)
-
SCO is wrong for an additional reason: Although SCO makes much
of its assertion that SuSe created the modified Linux that SCO
distributed as SCO Linux Server 4.0 powered by UnitedLinux, SCO
tells only half the story. SuSe modified Linux as part of
UnitedLinux, a four-member organization to which SCO belonged by
virtue of its signing a Joint Development Contract with SuSe and
other United Linux members. The whole point of UnitedLinux was to
create a "standardized" Linux distribution (IBM Ex. 221 ¶ 96),
i.e., create a modification of Linux. SuSe did so —
and SCO then added its own modifications to the program and
distributed its modification of Linux as SCO Linux Server 4.0.
(IBM Copy. Br. ¶ 35.) Accordingly, Section 2 of the GPL
applies, and SCO was permitted to charge no Linux fees at all.
Moreover, even if SCO did not modify Linux itself, it indisputably
distributed a version of Linux modified by SuSe as part of United
Linux. SCO may charge no fees for such a distribution of a
modification of Linux other than those permitted under GPL Section
1. (IBM Ex. 128 § 2.) Indeed, SCO itself admits that GPL
Section 2 applies to SCO's Linux distribution; SCO explicitly
relies on that section in opposition to another of IBM's motions.
(See SCO's Mem. in Opp. to IBM's Motion for Summary Judgment
on Its Claim for Decl. Judgment of Non-Infringement (IBM's Tenth
Counterclaim), at 69 & ¶ 98.)
(Referenced here)
-
Similarly, SCO's argument that nothing in the GPL "prohibits SCO
from offering [a license to its UNIX software]" (Opp'n Br. at 24)
is wrong. Section 7 expressly precludes a GPL licensee such as SCO
from charging fees for such a license as applied against the
GPL-licensed work unless SCO can "satisfy simultaneously [its]
obligations under this License". With its UNIX licensing program
(which is in fact a Linux licensing program, no matter what SCO
calls it), SCO has breached, not satisfied, its obligations under
the GPL with its Linux licensing activities. (See IBM Copy.
Br. at 17-20 & ¶¶ 40-47; see also IBM Opp'n
Br. at 25-27.)
(Referenced here)
-
See MCA Television Ltd. v. Public Interest Corp.,
171 F.3d 1265, 1275 (11th Cir. 1999) ("Of course, copyright
protections remain in the background to ensure that licensees do
not use materials in ways that exceed the scope of their
licenses."); Jacob Maxwell, Inc. v. Veeck, 110 F.3d 749,
753-54 (11th Cir. 1997) ("This is not a case where payment of JMI's
costs and public recognition of authorship were made conditions
precedent to the granted right to play. In such a case, absent
performance of the conditions, the `license' would not have issued
and the Miracle's public performances of the song would have
violated JMI's copyright." (citation omitted)).
(Referenced here)
-
The "object-code-only" restriction violates Sections 4 and 6 of
the GPL because all GPL licensees are entitled to use, modify and
distribute Linux code. (IBM Ex. 128 §§ 1-4, 6; IBM Copy.
Br. ¶¶ 11-13, 19-20; IBM Opp'n Br. ¶¶ 4-6.) The
purported restriction against sub-licensing and distribution
violates the GPL — including Sections 4 and 6 — because
all GPL licensees are entitled to sublicense and distribute Linux.
(IBM Ex. 128 §§ 1-4, 6; IBM Copy. Br. ¶¶ 11-13,
19-20; IBM Opp'n Br. ¶¶ 4-6.)
(Referenced here)
-
See, e.g, Silicon Image, Inc. v. Genesis Microchip
Inc., 395 F.3d 1358, 1359 (Fed. Cir. 2005) (describing patent
owner who granted limited royalty-free license to patent claims
necessarily infringed by anyone practicing industry standard in
order to "foster and develop the standard and have it adopted
industry-wide"); Intel Corp. v. VIA Techs., Inc., 319 F.3d
1357, 1359 (Fed. Cir. 2003) (noting that Intel granted a limited
royalty-free cross-license "to all those interested in complying
with" an Intel-promulgated industry standard).
Neither case cited by SCO offers any support for SCO's attempt
to find shelter in a public policy favoring the protection of
intellectual property rights — after its blatant disregard of
the intellectual property rights of IBM. See San Huan New
Materials High Tech, Inc. v. Int'l Trade Comm'n, 161 F.3d 1347,
1363 (Fed. Cir. 1999); Concrete Mach. Co. v. Classic Lawn
Ornaments, Inc., 843 F.2d 600, 612 (1st Cir. 1988) (It is
"virtually axiomatic that the public interest can only be served by
upholding copyright protections" (citation and quotation marks
omitted)). (See IBM Copy. Br. at 22.)
(Referenced here)
-
It is one thing for SCO to contend, based on affidavits of its
own employees, that SCO instituted its Linux licensing program
because they thought at the time that IBM (or others) had
misappropriated SCO-owned code. It is quite another for SCO to ask
the Court to bar IBM from pursuing its copyright claim at all on
the basis of SCO's alleged supposition. Moreover, it was entirely
within SCO's power to seek legal relief consistent with its GPL
obligations if it believed Linux to contain its code. Instead, SCO
took it upon itself to impose licenses on the Linux using world in
violation of the GPL. Neither IBM nor anyone else made SCO choose
that path of licensing vigilantism.
(Referenced here)
|