Here's IBM's Reply Memorandum in Further Support of its Motion for Summary Judgment on its Claim for Declaratory Judgment of Non-Infringement with respect to its Linux Activities (IBM's Tenth Counterclaim) [PDF]. This was one of the summary judgment motions heard by Judge Kimball on March 7th (transcript is here for reference).
Once again, IBM is going way out of its way to show to the Court the absurdity of SCO's claims, this time SCO's claim that IBM has infringed SCO's copyrights by copying and distributing Linux ("way out of their way" since this thing is eighty pages, has seven and a half pages of case citations, and sixty-four footnotes -- whew).
There are quite a few good bits in here, one stands out in particular at PDF page 17, where IBM describes SCO's evidence presented to support its assertions of facts:
Where SCO offers evidence to support its assertion of fact, it
often does so by a labyrinth of cross-references that plainly fail
to meet the specificity requirements of Local Rule 56-1(c). For
example, in response to IBM ¶ 233, SCO directs the Court to
its responses to IBM ¶¶ 27, 118, 192, 220, 222, 223, 226,
228, 236. SCO's response to IBM ¶ 228 directs the Court to
SCO's response to IBM ¶¶ 27, 118, 192, 220, 222. SCO's
response to IBM ¶ 222 directs the Court to SCO's response to
IBM ¶¶ 27, 118, 192, 223, 233, 236. SCO's response to IBM
¶ 27 directs the Court to SCO's response to IBM ¶¶
4, 22, 187. SCO's response to IBM ¶ 187 directs the Court to
SCO's response to IBM ¶¶ 4, 5, 27, 45. SCO's response to
IBM ¶ 5 directs the Court to SCO's response to IBM
¶¶ 1, 2. SCO's response to IBM ¶ 2 directs the Court
to SCO's response to IBM ¶¶ 1, 283, 284, 285. SCO's
response to IBM 283-284 directs the Court to SCO's response to IBM
¶¶ 30-33, 98. SCO's response to IBM ¶ 98 directs the
Court to SCO's response to IBM ¶¶ 96-97. SCO's response
to IBM ¶ 96 directs the Court to SCO's response to IBM
¶¶ 4, 22, 35, 40-41, 54, 59-60, 63, 66, 69-71, 85-87, 89,
103. And so on.
As always, if you think there's a mistake in the text, please check against the PDF.
**********************************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 DECLARATORY JUDGMENT OF
NON-INFRINGEMENT (IBM'S TENTH
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)
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
DECLARATORY JUDGMENT OF NON-
INFRINGEMENT
(IBM'S TENTH COUNTERCLAIM)
(ORAL ARGUMENT REQUESTED)
FILED UNDER SEAL PURSUANT TO 9/16/03
PROTECTIVE ORDER, DOCKET #38
Civil No. 2:03-CV-00294 DAK
Honorable Dale A. Kimball
Magistrate Judge Brooke C. Wells
|
2
TABLE OF CONTENTS
Page |
Table of Authorities |
iii |
Preliminary Statement |
1 |
Statement of Undisputed Facts |
4 |
Argument |
6 |
I. |
SCO BEARS THE BURDEN OF DEMONSTRATING THAT THERE
ARE GENUINE ISSUES OF MATERIAL FACT IN DISPUTE |
6 |
II. |
SCO CANNOT PROVE UNAUTHORIZED COPYING BY IBM OF
COPYRIGHTED WORKS OWNED BY SCO |
9 |
|
A. |
SCO Cannot Prove Unauthorized Copying |
9 |
|
B. |
SCO Cannot Prove Ownership of the Copyrights in the
System V Code |
13 |
|
|
1. |
SCO Is Not Entitled to a Presumption of Ownership |
13 |
|
|
2. |
IBM Can Challenge SCO's Ownership |
15 |
|
|
3. |
SCO Transferred Any Rights It Had to UnitedLinux |
16 |
III. |
IBM HAS ONE OR MORE LICENSES TO THE DISPUTED
CODE |
20 |
|
A. |
IBM Has a License Under the Strategic Business
Agreement |
21 |
|
B. |
IBM Has a License Under the GPL |
25 |
|
C. |
Novell and USL Granted IBM a License |
27 |
|
D. |
The TIS Committee Granted IBM a License |
30 |
IV. |
SCO'S CLAIMS ARE FORECLOSED UNDER THE DOCTRINES OF
ESTOPPEL, WAIVER AND ABANDONMENT |
34 |
|
A. |
SCO's Misconduct Is Not Beyond the Equitable Power
of the Court |
35 |
|
B. |
IBM Reasonably Relied on SCO's Conduct to Its
Detriment |
37 |
|
|
1. |
Caldera |
37 |
3
|
|
2. |
SCO |
39 |
|
|
3. |
Santa Cruz |
41 |
|
|
4. |
IBM |
43 |
|
C. |
IBM Was Ignorant of the Fact That SCO Would Assert
Claims to Linux |
46 |
V. |
SCO CANNOT SHOW SUBSTANTIAL SIMILARITY BETWEEN
LINUX AND PROTECTABLE ELEMENTS OF THE SYSTEM V WORKS |
48 |
|
A. |
None of the System V Code Is Protectable by
Copyright. |
48 |
|
|
1. |
The System V Code Was Dictated by Externalities |
48 |
|
|
2. |
The System V Code Represents Mere Ideas or Merger Material |
51 |
|
|
3. |
The System V Code Lacks Even De Minimis Originality |
55 |
|
B. |
Linux Is Not Substantially Similar to the System V
Works, Even Assuming the Protectability of the System V Code |
57 |
VI. |
SCO HAS MISUSED ITS ALLEGED COPYRIGHTS |
60 |
Conclusion |
64 |
4
Table of Authorities
Page |
Cases |
3M Innovative Prop. Co. v. Barton Nelson. Inc.,
No. 02-3591, 2003 WL 22989077 (D. Minn. Dec. 12,2003) |
22 |
Adler v. Wal-Mart Stores. Inc.,
144 F.3d 664 (10th Cir. 1998) |
7, 59 |
Alcatel v. DGI Tech., Inc.,
166 F.3d 772 (5th Cir. 1999) |
63 |
Armento v. City of Ashville Downtown Dev. Office,
No. 94-57, 1996 WL 677119 (W.D.N.C. Mar. 26, 1996) |
35 |
Arnold Indus, v. Love,
63 P.3d 721 (Utah 2002) |
22 |
Ashley Creek Phosphate Co. v. Chevron,
129 F. Supp. 2d 1299 (D. Utah 2000) |
4 |
Bakowski v. Mountain States Steel. Inc.,
52 P.3d 1179 (Utah 2002) |
17 |
Bieg v. Hovnanian Enter., Inc.,
157 F. Supp. 2d 475 (E.D. Pa. 2001) |
16 |
Brown Bag Software v. Symantec Corp.,
960 F.2d 1465 (9th Cir. 1992) |
59 |
Brown v. Latin American Music Co., Inc.,
No. 05-1242, 2006 WL 2059606 (D.P.R. July 21, 2006) |
14, 15, 16 |
Buckward Digital Servs., Inc v. Millar Instruments,
No. 05-1728, 2006 WL 1118003 (S.D. Tex. Apr. 26 2006) |
35 |
Cambridge Elec. Corp. v. MGA Elec., Inc.,
227 F.R.D. 313 (CD. Cal. 2004) |
12 |
Carlson v. C.H. Robinson Worldwide. Inc.,
Nos. 02-3780 & 02-4261,2005 WL 758601 (D. Minn. Mar. 30,
2005) |
49, 50, 57 |
5
Carson v. Dvnegv. Inc.,
344 F.3d 446 (5th Cir. 2003) |
45,46 |
Celotex Corp. v. Catrett,
477 U.S. 317 (1986) |
6 |
Chase v. Scott,
38 P.3d 1001 (Utah App. 2001) |
19 |
Computer Assocs. Int'l v. Altai. Inc.,
982 F.2d 692 (2d Cir. 1992) |
53 |
Country Kids 'N City Slicks. Inc. v. Sheen,
77 F.3d 1280 (10th Cir. 1996) |
58,59 |
Cudjoe v. Indep. Sch. Dist. No. 12,
297 F.3d 1058 (10th Cir. 2002) |
7 |
DeCarlo v. Archie Comic Pub., Inc.,
127 F. Supp. 2d 497 (S.D.N.Y. 2001) |
35, 42 |
Dollar Sys., Inc. v. Avcar Leasing Sys., Inc.,
890 F.2d 165 (9th Cir. 1989) |
43,44 |
Dymo Indus., Inc. v. Monarch Marking Svs., Inc,
474 F. Supp. 412 (S.D. Tex. 1979) |
38 |
Eastman Kodak Co. v. Rakow,
739 F. Supp. 116 (W.D.N.Y. 1989) |
36 |
Energetec Svs., Inc. v. Kayser,
No. 84-10611,1986 WL 8058 (N.D. 111. July 17,1986) |
43 |
Feist Publ'ns. Inc. v. Rural Tel. Serv. Co. Inc.,
499 U.S. 340 (1991) |
55, 56, 57 |
Field v. Google Inc.,
412 F. Supp. 2d 1106 (D. Nev. 2006) |
35 |
Flinders v. Workforce Stabilization Plan of Phillips
Petroleum Co.,
No. 04-541,2006 WL 641524 (D. Utah Mar. 10,2006) |
17 |
Forest Labs., Inc. v. Abbott Labs.,
No. 96-159, 1999 WL 33299123 (W.D.N.Y. June 23, 1999) |
36 |
6
Frybarger v. I.B.M. Corp.,
812 F.2d 525 (9th Cir. 1987) |
60 |
Gates Rubber Co. v. Bando Chem. Indus., Ltd.,
9 F.3d 823 (10th Cir. 1993) |
14,49, 53, 54, 59 |
Gemisys Corp. v. Phoenix Am., Inc.,
186 F.R.D. 551 (N.D. Cal. 1999) |
60 |
Glass v. Pfeffer,
849 F.2d 1261 (10th Cir. 1988) |
38 |
Glenayre Elec., Inc. v. Jackson,
No. 02-0256,2003 WL 366574 (N.D. Ill. Feb. 19, 2003) |
9 |
Hadady Corp. v. Dean Witter Reynolds. Inc.,
739 F. Supp. 1392 (C.D. Cal. 1990) |
35 |
Hart v. Sampley,
No. 91-3068, 1992 WL 336496 (D.D.C. June 24, 1991) |
15 |
Hiland Potato Chip Co. v. Culbro Snack Foods. Inc.,
585 F. Supp. 17 (D. Iowa 1982) |
38 |
Hilgraeve Corp. v. Symantec Corp.,
265 F.3d 1336 (Fed. Cir. 2001) |
22 |
Hoehn v. Crews,
144 F.2d 665 (10th Cir. 1944) |
44 |
Button Contracting Co., Inc. v. City of Coffeyville,
No. 02-4130,2004 WL 2203449 (D. Kan. Sept. 24,2004) |
50, 57 |
I.A.E., Inc. v. Shaver,
74 F.3d 768 (7th Cir. 1996) |
22 |
In re Papst Licensing. GmbH Patent Litig.,
Nos. MDL 1298, 99-3118,2000 WL 1859013 (E.D. La. Dec. 19,2000) |
36,37 |
Intellicall. Inc. v. Phonometrics. Inc.,
952 F.2d 1384 (Fed. Cir. 1992) |
9 |
Interactive Network. Inc. v. NTN Cornm., Inc.,
875 F. Supp. 1398 (N.D. Cal. 1995) |
7, 8 |
7
Jacobsen v. Deseret Book Co.,
287 F.3d 936 (10th Cir. 2002) |
14 |
Jamesbury Coip. v. Litton Indus. Products. Inc.,
646 F. Supp. 1495 (D. Conn. 1986) |
35 |
Johnston v. IVAC Corp.,
885 F.2d 1574 (Fed. Cir. 1989) |
9 |
Keane Dealer Services. Inc. v. Harts,
968 F. Supp. 944 (S.D.N.Y. 1997) |
35, 38, 42, 45, 46 |
Konstant Prods. Inc. v. Frazier Indus. Co., Inc.,
No. 91-4491, 1993 U.S. Dist. LEXIS 7957 (N.D. 111. June 7,
1993) |
38 |
Kraatz v. Heritage Imports,
71 P.3d 188 (Utah App. 2003) |
19 |
Kraft v. Cohen,
32 F. Supp. 821 (E.D. Pa. 1940) |
46 |
Kumho Tire Co. v. Carmichael,
526 U.S. 137(1999) |
49 |
Larami Corp. v. Amron,
No. 91-6145, 1993 WL 69581 (E.D. Pa. Mar. 11, 1993) |
8 |
Lasercomb America. Inc. v. Reynolds,
911 F.2d 970 (4th Cir. 1990) |
63 |
Lauth v. McCollum,
No. 03-8529,2004 WL 2211620 (N.D. 111. Sept 30,2004) |
12 |
Lawrence v. IBP. Inc.,
No. 94-2027, 1995 WL 261144 (D. Kan. Apr. 21, 1995) |
12, 52 |
Lefler v. United Healthcare of Utah. Inc.,
162 F. Supp. 2d 1310 (D. Utah 2001) |
7 |
Lvrick Studios. Inc. v. Big Idea Productions. Inc.,
420 F.3d 388 (5th Cir. 2005) |
15 |
Maoris & Assocs., Inc. v. Neways. Inc.,
986 P.2d 748 (Utah 1999) |
38 |
8
McCullough Tool Co. v. Well Surveys. Inc.,
395 F.2d 230 (10th Cir. 1968) |
44 |
McFadden v. R&R Engine & Machine Co.,
102 F. Supp. 2d 458 (N.D. Ohio 2000) |
44 |
Medimmune. Inc. v. Centocor. Inc.,
271 F. Supp. 2d 762 (D. Md. 2003) |
7 |
Medtronic. Inc. v. Guidant Corp.,
No. 00-1473,2003 WL 21181103 (D. Minn. May 16,2003) |
22 |
MGA. Inc. v. Centri-Spray Corp.,
639 F. Supp. 1238 (E.D. Mich. 1986) |
38 |
Minebea Co., Ltd, v. Papst,
444 F. Supp. 2d 68 (D.D.C. 2002) |
36 |
Mirmingos v. Benjamin,
288 B.R. 521 (Bankr. N.D. 111. 2003) |
44 |
MiTek Holdings. Inc. v. Arce Eng'g. Co., Inc.,
89 F.3d 1548 (11th Cir. 1996) |
53 |
Mitel. Inc. v. Iqtel. Inc.,
124 F.3d 1366 (10th Cir. 1997) |
51, 55, 56, 57 |
Moore v. Pyrotech Corp.,
13 F.3d 406, 1993 WL 513834 (10th Cir. 1993) |
38 |
Nat'l Cable Television Assoc. v. Broad. Music. Inc.,
772 F. Supp. 614 (D.D.C. 1991) |
44 |
Newman v. Checkrite California. Inc.,
912 F. Supp. 1354 (E.D. Cal. 1995) |
36 |
Ontario Die Co. of America v. Indep. Die Assoc.,
Inc.,
No. 89-30035, 1990 WL 300899 (E.D. Mich. Aug. 24,1990) |
9 |
Ory v. McDonald,
68 U.S.P.Q.2d 1812 (CD. Cal. 2003) |
38 |
Pannonia Farms. Inc. v. USA Cable,
No. 03-7841, 2004 WL 1276842 (S.D.N.Y. June 8,2004) |
15 |
9
Peer Int'l Corp. v. Luna Records. Inc.,
887 F. Supp. 560 (S.D.N.Y. 1995) |
46 |
Phillips Petroleum Co. v. Lujan,
95 lF.2d 257 (10th Cir. 1991) |
24 |
Pioneer Hi-Bred Int'l., Inc. v. Ottawa Plant Food.
Inc.,
219 F.R.D. 135 (N.D. Iowa 2003) |
50, 57 |
Positive Black Talk. Inc. v. Cash Money Records.
Inc.,
No. 02-0425, 2003 WL 1522941 (E.D. La. Mar. 20, 2003) |
16 |
Practice Mgmt. Info. Corp. v. Ana. Med. Assoc.,
121 F.3d 516 (9th Cir. 1997) |
63 |
Productivity Software Int'l. Inc. v. Healthcare Tech.,
Inc.,
No. 93-6949,1995 WL 437526 (S.D.N.Y. July 25, 1995) |
60 |
Pyrodyoe Corp. v. Pyrotronics Corp.,
847 F.2d 1398 (9th Cir. 1988) |
36 |
Quinn v. City of Detroit,
23 F. Supp. 2d 741 (E.D. Mich. 1998) |
45,46 |
Rambus. Inc. v. Infineon Tech. AG.,
326 F Supp. 2d 721 (E.D. Va. 2004) |
39 |
Religious Tech. Ctr. v. Netcom On-Line Communication Servs.,
Inc.,
923 F. Supp. 1231 (N.D. Cal. 1995) |
14 |
Remington Rand v. Acme Card Sys. Co.,
29 F. Supp. 192 CD. Ohio 1937) |
38 |
Respect. Inc. v. Comm. on the Status of Women,
815 F. Supp. 1112 (N.D. 111. 1993) |
22 |
RT Computer Graphics. Inc. v. United States,
44 Fed. Cl. 747 (Fed. Cl. 1999) |
22 |
Schiller & Schmidt. Inc. v. Nordisco Corp.,
969 F.2d 410 (7th Cir. 1992) |
15 |
Sem-Torq. Inc. v. K Mart Corp.,
936F.2d851 (6th Cir. 1991) |
14,15,16 |
10
Shea v. Fantasy Inc.,
No. 02-02644, 2003 WL 881006 (N.D. Cal. Feb. 27,2003) |
14, 15, 16 |
Steinberg v. Columbia Pictures Industries., Inc.,
663 F. Supp. 706 (S.D.N.Y. 1987) |
46 |
Steiner Sales Co. v. Schwartz Sales Co.,
98 F.2d 999 (10th Cir. 1938) |
8 |
Stone v. COS Distrib. Inc.,
No. 93-1288, 1994 WL 832021 (D. Colo. Aug. 18, 1994) |
12, 52 |
Stover v. Eagle Prods., Inc.,
No. 93-4047, 1996 WL 172972 (D. Kan. Mar. 19,1996) |
49, 57 |
Sunham Home Fashions. LLC v. Pern-American. Inc.,
No. 02-6284, 2002 WL 31834477 (S.D.N.Y. Dec. 17, 2002) |
15 |
Tamburo v. Calvin,
No. 94-5206, 1995 WL 121539 (N.D. 111. Mar. 17,1995) |
63 |
Taylor Engines v. All Steel Engines,
I92F.2dl71 (9th Cir. 1951) |
22 |
The SCO Group. Inc. v. Novell. Inc.,
No. 04-00139, 2004 WL 4737297 (D. Utah June 9,2004) |
19 |
Trainor v. Apollo Metal Specialties. Inc.,
318 F.3d 976 (10th Cir. 2003) |
6 |
Tuff 'N' Rumble Mgmt., Inc. v. Profile Records.
Inc.,
No. 95-0246, 1997 WL 158364 (S.D.N.Y. Apr. 2,1997) |
14, 15,16 |
Ushodaya Enters., Ltd, v. V.R.S. Int'l. Inc.,
63 F. Supp. 2d 329 (S.D.N.Y. 1999) |
14 |
Utah Lighthouse Ministry. Inc. v. Discovery Computing.
Inc.,
No. 05-380, 2005 WL 3263157 (D. Utah Dec. 1,2005) |
44 |
Utah Transit Auth. v. Salt Lake City Southern R.R. Co.,
Inc.,
131 P.3d 288 (Utah App. 2006) |
17 |
Vanover v. Altec Indus., Inc.,
82Fed.Appx. 8,10 (lOtii Cir. 2003) |
49,57 |
11
Wafer Shave. Inc. v. Gillette Co.,
857 F. Supp. 112 (D. Mass. 1993) |
35 |
Wang Labs., Inc. v. Mitsubishi Elec. Am., Inc.,
103 F.3d 1571 (Fed. Cir. 1997) |
39 |
Wells v. Boston Ave. Realty,
125 F.3d 1335 (10th Cir. 1997) |
17 |
Whelan Assocs., Inc. v. Jaslow Dental Lab., Inc.,
797 F.2d 1222 (3d Cir. 1986) |
59 |
Wuv's Int'l. Inc. v. Love's Enters., Inc.,
208 U.S.P.Q. 736 (D. Colo. 1980) |
8 |
Statutes & Rules |
17 U.S.C. § 410(c) |
15 |
U.C.A. 1953 § 57-1-10 |
22 |
Other Authorities |
12 Moore's Federal Practice § 57.62[2][d] (3d ed.
1997) |
7 |
DUCivR 56-l(c) |
4, 5,49, 53, 61 |
Fed. R. Civ. P. 37(c) |
52 |
Fed. R. Civ. P. 56 |
4 |
Fed. R. Civ. P. 56(e) |
7 |
Fed. R. Evid. 702 |
6,49,50, 57 |
12
Defendant/Counterclaim Plaintiff International Business Machines
Corporation ("IBM") respectfully submits this reply memorandum in
support of its motion for summary judgment on its claim for
declaratory judgment of non-infringement with respect to IBM's
Linux activities (the "Tenth Counterclaim") against
PlaintifffCounterclaim-Defendant The SCO Group, Inc. ("SCO").
Preliminary Statement1
In its opening brief, IBM offered multiple independent reasons
why it is entitled to a declaration that its Linux activities do
not infringe SCO's alleged UNIX copyrights. To avoid summary
judgment, SCO was required to adduce admissible evidence
demonstrating a genuine issue of material fact as to IBM's alleged
infringement. Rather than do so, SCO's opposition seeks to shift
the burden of proof to IBM and rely on a mass of new allegedly
misused material not specifically identified by SCO in its Final
Disclosures. But the law is clear that the burden of proof lies
with SCO, and the Court has been clear that SCO's allegations of
infringement are limited to the
SECTION REDACTED
As to those.
SECTION REDACTED
SCO's claims of infringement fail as a matter of law for at
least five independent reasons, any one of which justifies the
entry of summary judgment in favor of IBM.
First, SCO cannot establish unauthorized copying by IBM
of copyrighted works owned by SCO. From the inception of this case,
SCO declined to disclose its allegations and alleged
13
evidence of infringement by IBM. Now, after years of litigation,
it is clear why — it has none. SCO's Final Disclosures do not
specifically identify anything IBM is supposed to have done to
infringe SCO's alleged copyrights. Nor do they identify a shred of
evidence that IBM has infringed them. Despite the Court's orders,
SCO's opposition papers identify as misused material nowhere
mentioned in SCO's Final Disclosures. Judge Wells already ruled
that SCO may not rely on this information, however, leaving SCO's
allegations bare. Thus, IBM is entitled to summary judgment for
that reason alone. (See Part I below.)
Second, IBM has a license to use all of the Linux Code
and, as to much of it, multiple licenses. SCO generally does not
dispute the meaning of the plain language of the agreements. SCO
instead launches a salvo of unsupported and sometimes
self-contradictory arguments to create the appearance of a fact
question. But none of SCO's arguments is supported by the evidence.
Thus, even if SCO had complied with the Court's orders to disclose
its allegations and evidence, IBM's licenses provide it with a
complete defense to all of SCO's claims of infringement.
(See Part II below.)
Third, while SCO endeavors to conjure up fact questions,
the undisputed facts compel the conclusion that SCO is estopped
from pursuing its attack on the operating system it helped to
create. SCO, once one of the largest Linux companies in the world,
knew the Linux Code was in Linux long before the commencement of
this case. SCO was in fact responsible for much of it being there.
Moreover, SCO vigorously promoted and widely distributed Linux,
including the very code at issue, before and after it purports to
have acquired the alleged copyrights. It simply cannot be that SCO
can permissibly profit from the allegedly infringing code for
years, and then when it concludes more money can be made elsewhere,
claim infringement with respect to the same code on the theory that
it is unlawfully in Linux. (See Part III below.)
14
Fourth, SCO's allegations of infringement depend on the
proposition that the allegedly infringing code renders Linux
"substantially similar" to the System V Works. Even if
SECTION REDACTED
were protectable by copyright, SCO could not show that Linux is
substantially similar. The allegedly infringed code is trivial in
size —
SECTION REDACTED
Put in perspective, the code identified by SCO is proportional
to less than one word selected from this entire brief. In any
event, the few lines of code identified by SCO are unprotectable by
copyright law. SCO's opposition simply ignores evidence that
the
SECTION REDACTED
at issue are unprotectable and instead devotes much of its
substantial-similarity argument to allegations that have been
rejected by the Court as exceeding the scope of the Final
Disclosures. (See Part IV below.)
Fifth, SCO cannot enforce its alleged copyrights in the
System V Works because it has misused them by exceeding the scope
of the allegedly infringed copyrights. In its assault on Linux and
IBM, SCO has fired shots indiscriminately, laying claim to vast
quantities of material in which it has no alleged copyrights and
could not possibly claim copyright For example, SCO has sought
control over all of Linux (whether alleged to infringe System V or
not), IBM's homegrown code and code owned by BSD. In its opposition
papers, SCO does not (and cannot) contest the multiple grounds
entitling IBM to a finding of misuse, instead offering only a brief
exposition on irrelevant issues that do not refute its copyright
misuse. Thus, independent of the other reasons for granting IBM
summary judgment, SCO should not be allowed to enforce its alleged
copyrights based on misuse. (See Part V below.)
When all is said and done, SCO's claims of infringement relating
to the Linux kernel
SECTION REDACTED
concern a mere
SECTION REDACTED
— no more. SCO's Final Disclosures do not identify a shred
of evidence that IBM copied that code. In any case, IBM has
multiple licenses to it, a number of
15
them from SCO. Notably, SCO promoted and distributed Linux
with
SECTION REDACTED
for years, without making so much as a peep about it infringing
SCO's rights. Indeed, before
SECTION REDACTED
none of which is protectable by copyright, could not possibly
render Linux substantially similar to UNIX System V, as is further
discussed below.
Statement of Undisputed Facts
IBM's opening papers set out, supported with admissible
evidence, 308 statements of undisputed fact. Despite the volume of
its opposition papers, SCO fails properly to contest them, as
described in Addendum A, which is incorporated here by reference.
While SCO expressly concedes few of IBM's facts, it fails
specifically to controvert those it purports to dispute with
evidence of record meeting the requirements of Fed. R. Civ. P. 56.
Pursuant to Local Rule 56- 1(c), IBM's facts should therefore be
deemed admitted.
Rather than specifically controvert IBM's statement of facts,
SCO offers its own counterstatement of facts. However, a party
cannot avoid summary judgment based on a counterstatement of facts
mat does not satisfy the requirement of Local Rule 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 and
precluded by order of the Court.
Notably, SCO's response to IBM's statement of undisputed facts
is largely a frolic and detour into the irrelevant, plainly
designed to give the false impression of a fact dispute. For
16
example, SCO provides long narrative responses that do not meet
IBM's statement of fact but rather relate loosely to its theory of
the case. For example:
- In response to IBM's assertion in its fact ¶ 54 that the
creation of standards for Linux was important for Caldera and other
Linux distributors, SCO states that it was generally known that
SECTION REDACTED
- In response to IBM's assertion in its fact ¶ 187 that none
of the
SECTION REDACTED
and has long been publicly available, SCO recites a laundry-list of
unrelated Linux activities in which it alleges IBM has
partaken.
- In response to IBM's 34-word assertion in its fact ¶ 5
that Linux is an "open source" program, SCO offers an 886-word
argument that SCO's UNIX assets were never properly licensed under
the GPL.
Where SCO offers evidence to support its assertion of fact, it
often does so by a labyrinth of cross-references that plainly fail
to meet the specificity requirements of Local Rule 56-l(c). For
example, in response to IBM ¶ 233, SCO directs the Court to
its responses to IBM ¶¶ 27, 118, 192, 220, 222, 223, 226,
228, 236. SCO's response to IBM ¶ 228 directs the Court to
SCO's response to IBM ¶¶ 27, 118, 192, 220, 222. SCO's
response to IBM ¶ 222 directs the Court to SCO's response to
IBM ¶¶ 27, 118, 192, 223, 233, 236. SCO's response to IBM
¶ 27 directs the Court to SCO's response to IBM ¶¶
4, 22, 187. SCO's response to IBM ¶ 187 directs the Court to
SCO's response to IBM ¶¶ 4, 5, 27, 45. SCO's response to
IBM ¶ 5 directs the Court to SCO's response to IBM
¶¶ 1, 2. SCO's response to IBM ¶ 2 directs the Court
to SCO's response to IBM ¶¶ 1, 283, 284, 285. SCO's
response to IBM 283-284 directs the Court to SCO's response to IBM
¶¶ 30-33, 98. SCO's response to IBM ¶ 98 directs the
Court to SCO's response to IBM ¶¶ 96-97. SCO's response
to IBM ¶ 96 directs the Court to SCO's response to IBM
¶¶ 4, 22, 35, 40-41, 54, 59-60, 63, 66, 69-71, 85-87, 89,
103. And so on.
IBM's objections to the evidence on which SCO relies are
summarized at Addendum B, which is incorporated herein by
reference. Suffice it to say here that SCO's opposition depends
almost entirely on evidence that was not disclosed by SCO in its
Final Disclosures and/or does
17
not meet the requirements of Federal Rule of Evidence 702 and is
therefore inadmissible. One example of many is the purported
SECTION REDACTED
As the Court already ruled, SCO may not rely on such objectionable
and inadmissible evidence.
For the Court's convenience, the
SECTION REDACTED
are reproduced at Addendum C. A table summarizing many of the flaws
in SCO's claims as to this code appears at Addendum D.
Argument
I. SCO BEARS THE BURDEN OF DEMONSTRATING THAT THERE ARE
GENUINE ISSUES OF MATERIAL FACT IN DISPUTE.
SCO misstates the standard this Court must apply in considering
IBM's motion. Although SCO has been asserting publicly for more
than three years that it has substantial evidence that source code
in Linux infringes its purported UNIX copyrights, SCO now contends
it is IBM's burden in this case to show that Linux does not contain
material that infringes SCO's copyrights. (SCO Opp'n. at 49.)
Because IBM's Tenth Counterclaim seeks a declaration of
non-infringement, SCO is wrong.
"[W]here the non-moving party will bear the burden of proof at
trial", summary judgment must be granted if "the nonmoving party
has failed to make a sufficient showing on an essential element of
[its] case". Celotex Corp. v. Catrett, 477 U.S. 317, 323-324
(1986): see Trainor v. Apollo Metal Specialties,
Inc., 318 F.3d 976, 979 (10th Cir. 2003) (holding that the
moving party can carry its burden on a motion for summary judgment
"by showing that the nonmoving party does not have enough evidence
to carry its burden of persuasion at trial"). In this Circuit,
therefore, although IBM "bears the initial burden of making a prima
facie demonstration of the absence of a genuine issue of material
fact and entitlement to judgment as a matter of law", IBM
18
"need not negate the nonmovant's claim" with any evidence.
See Adler v. Wal-Mart Stores, Inc., 144 F.3d 664,
670-71 (10th Cir. 1998) (emphasis added): see also Cudjoe
v. Indep. Sch. Dist. No. 12, 297 F.3d. 1058,1062 (10th Cir.
2002). Rather, IBM is entitled to summary judgment if it can
"point[] out to the court a lack of evidence for the nonmovant on
an essential element of the nonmovant's claim".2 Adler, 144 F.3d at
671.
Since IBM merely seeks a declaration that it does not infringe
SCO's alleged copyrights, SCO, not IBM, bears the burden of proof
at trial. It is well-established that when a declaratory judgment
plaintiff seeks a declaration of non-infringement, the party
claiming infringement — i.e., the declaratory judgment
defendant —€bears the burden.3 See Medimmune, Inc.
v. Centocor, Inc., 271 F. Supp. 2d 762, 769-70 (D. Md. 2003)
("[I]n a typical patent infringement declaratory judgment case
where the declaratory plaintiff seeks a holding of
non-infringement, the patent holder retains the burden of
proof despite being the nominal defendant.") (citations omitted);
Interactive Network, Inc. v. NTN Comm., Inc., 875 F. Supp.
1398, 1403 (N.D. Cal. 1995) (holding that the defendant in a
declaratory judgment action seeking a declaration of non-
19
infringement bears the burden of proof); Larami Corp. v.
Amron, No. 91-6145, 1993 WL 69581, at *3 (E.D. Pa. Mar. 11,
1993) (same) (DJ Br. Ex. C).
SCO's assertion that IBM bears the burden of proof is based on a
blatant misreading of the law. The principal case upon which SCO
relies to argue that IBM must prove at trial that it does not
infringe SCO's copyrights, Steiner Sales Co. v. Schwartz Sales
Co., 98 F.2d 999 (10th Cir. 1938), does not support that
proposition. (Opp'n at 49.) In Steiner, the declaratory
judgment plaintiff was not seeking a declaration of
non-infringement. Instead, the plaintiff sought to establish that
certain patent licensing agreements it had entered into with the
defendant violated federal antitrust laws. 98 F.2d at 1011. Thus,
Steiner stands only for the unremarkable proposition that a
plaintiff bears the burden of establishing it is entitled to the
declaration of an affirmative proposition that it is seeking
(i.e., that certain contracts violated antitrust laws), not
a declaration of a negative proposition, such as
non-infringement.4
Contrary to SCO's interpretation of the law, therefore, IBM is
entitled to summary judgment unless SCO is able to come forward
with specific evidence demonstrating a genuine issue of material
fact as to IBM's alleged infringement of SCO's copyrights.
See Interactive Network, 875 F. Supp. at 1403
("summary judgment of noninfringement for the alleged infringer
(Interactive) must be granted unless NTN can demonstrate a genuine
issue of material fact as to whether a reasonable jury could
conclude that the two works are substantially similar in both ideas
and expression"); Larami, 1993 WL 69581, at *3 ("on this
motion for partial summary
20
judgment, [declaratory judgment plaintiff] need only point out
the absence of evidence supporting a finding of infringement. To
resist this motion, [declaratory judgment defendant] must then come
forward with specific evidence showing that there is a genuine
issue of material fact for trial as to whether the '129 patent is
infringed").5
II. SCO CANNOT PROVE UNAUTHORIZED COPYING BY IBM OF
COPYRIGHTED WORKS OWNED BY SCO.
SCO does not dispute the fact that its infringement claim fails
(and IBM is entitled to summary judgment) if SCO cannot prove
unauthorized copying by IBM of copyrighted works owned by SCO. In
IBM's opening papers, we showed that: (1) SCO cannot prove
ownership of the allegedly infringed copyrights; and (2) SCO cannot
prove unauthorized copying by IBM. (DJ Br. at 76-79.) Nothing in
SCO's opposition papers refutes IBM's showing or justifies denial
of summary judgment.
A. SCO Cannot Prove Unauthorized Copying.
In IBM's opening brief, we explained that the Final Disclosures
and SCO's interrogatory responses reveal no evidence — none
— of unauthorized copying by IBM of the System V Code. (DJ
Br. ¶¶ 146-57.) In fact, neither the
SECTION REDACTED
(DJ Br. ¶¶ 192-97.) We
21
further explained that SCO cannot sustain its claims or avoid
summary judgment based on assertion alone and that in the absence
of evidence that IBM copied System V Code without authorization,
SCO cannot sustain its claims of infringement (DJ Br. at 76-79.)
SCO's opposition seeks improperly to cure these defects by relying
on allegations and evidence not specifically identified in its
Final Disclosures or interrogatory responses. That it cannot
do.
From the beginning of this case, IBM has asked SCO to specify
its allegations of misconduct. (DJ Br. at 76.) SCO repeatedly
declined, requiring the Court twice to order SCO to respond to
IBM's discovery requests and to specify its allegations.
(Id.) When SCO still refused to specify its allegations, IBM
moved for summary judgment. The Court recognized that SCO had
failed to offer evidence in support of its claims but deferred
resolving IBM's motions on the merits and established a final
deadline for SCO to disclose any allegations of misuse it wished to
pursue.6
(DJ Br. ¶¶ 159-161.) SCO submitted its Final Disclosures
late last year,
SECTION REDACTED
Recognizing that its Final Disclosures and interrogatory
responses come nowhere close to meeting SCO's disclosure
obligations and that it could not establish a claim of infringement
based on the
SECTION REDACTED
SCO proffered the testimony of Thomas Cargill to support
22
its copyright infringement claim relating to Linux. (IBM Ex.
175.) Rather than limit
SECTION REDACTED
IBM filed a motion to confine SCO's claims to and strike
allegations in excess of the Final Disclosures in order to quash
SCO's attempt to reinvent its case at the thirteenth hour through
the testimony of Dr. Cargill and its other experts. (IBM Ex. 67.)
IBM's motion detailed the
SECTION REDACTED
Magistrate Judge Wells granted IBM's motion in open court and
adopted IBM's reasoning as her own, holding that SCO may not
challenge as misused (by expert report or otherwise) any material
not specifically identified by SCO as misused in the Final
Disclosures. (See IBM Ex. 621.)
SCO's opposition papers depend entirely on allegations of misuse
by IBM not specifically identified in the Final Disclosures. Not
only does SCO's opposition rely on
SECTION REDACTED
Remarkably, SCO goes so far as to claim that IBM has conceded
that some of this new material was properly disclosed, and that
IBM's motion should
23
be denied because it did not address this new material in its
opening papers. (See Opp'n at 57 n.6.)8
Based on the Court's numerous orders on this subject, SCO's
invocation of undisclosed material is untenable. The Court's
December 12, 2003 order required SCO "[t]o respond fully and in
detail to Interrogatory Nos. 12 and 13 as stated in IBM's Second
Set of Interrogatories" (IBM Ex. 55 ¶ 2), which, in turn
require SCO to "identify, with specificity (by file and line of
code), (a) all source code and other material in Linux ... to which
plaintiff has rights; and... how the code or other material derives
from UNIX" and describe in detail how IBM is alleged to have
infringed plaintiff's rights". (IBM Ex. 12 at Interrog. Nos. 12,
13.) The Court's March 3, 2004 order required SCO "to provide and
identify with specificity all lines of code in Linux that it claims
rights to." (IBM Ex. 56 ¶ 4.) The Court's July 7, 2005 order
established December 22, 2005 as the "Final Deadline for Parties to
Identify with Specificity all Allegedly Misused Material." (IBM Ex.
58 at 4.) Finally, on November 30, 2006, Magistrate Judge Wells
held that SCO may not challenge as misused (by expert report or
otherwise) any material not specifically identified as misused by
IBM in the Final Disclosures. (IBM Ex. 621.) Thus, under the law of
the case, SCO's opposition is no impediment to the entry of summary
judgment.9
24
Even if SCO could properly rely on the
SECTION REDACTED
Nowhere in its opposition papers does SCO offer admissible
evidence of infringement by IBM. That is dispositive. Accordingly,
summary judgment should be entered in favor of IBM for this reason
alone.
B. SCO Cannot Prove Ownership of the Copyrights in the System
V Code.
Even if SCO could show unauthorized copying by IBM, IBM is also
entitled to summary judgment because SCO cannot prove ownership of
the four allegedly infringed copyrights (the "System V Works"). As
stated in IBM's opening brief: (1) SCO could not have acquired the
copyrights from Santa Cruz because Santa Cruz never acquired them
from Novell; and (2) even if Santa Cruz had acquired the copyrights
from Novell,
SECTION REDACTED
SCO's arguments in opposition lack merit.10
1. SCO Is Not Entitled to a Presumption of Ownership.
In an effort to avoid summary judgment, SCO argues first that it
is entitled to a presumption of ownership because "SCO holds
25
registration certificates in certain versions of UNIX, including
SVr4" (Opp'n at 49).11 SCO is wrong.
A purported copyright holder is entitled to a presumption of
validity and ownership only when it registered its copyrights
within five years of the work's first publication. See,
e.g., Sem- Torq, Inc. v. K Mart Corp., 936 F.2d 851, 854
(6th Cir. 1991); Brown v. Latin American Music Co., Inc.,
No. 05-1242,2006 WL 2059606, at *1 (D.P.R. July 21,2006) (Addendum
G hereto); Shea v. Fantasy Inc., No. 02-02644, 2003 WL
881006, at *4 (N.D. Cal. Feb. 27, 2003) (Addendum H hereto);
Tuff 'N' Rumble Mgmt., Inc. v. Profile Records, Inc., No.
95-0246, 1997 WL 158364, at *2 (S.D.N.Y. Apr. 2, 1997) (Addendum I
hereto).12 Here, SCO failed to produce a
registration statement for one of the four purported copyrighted
works
SECTION REDACTED
and thus cannot prove its timely registration or bring claims
thereunder.13
SECTION REDACTED
The remaining three copyrights clearly were not registered
within five years of first publication.14 Accordingly, SCO is not
entitled to a presumption of validity or ownership under
26
17 U.S.C. § 410(c) and retains the burden of showing
ownership. See Sem-Torq, 936 F.2d at 854 (holding
that plaintiff with invalid registration bore burden of proving
ownership); Brown, 2006 WL 2059606, at *1 (same);
Shea, 2003 WL 881006, at *4 (same); Tuff 'N' Rumble,
1997 WL 158364, at *2 (same).
2. IBM Can Challenge SCO's Ownership.
SCO next argues that "IBM is not entitled to challenge the chain
of title at all, as this is the subject of a pending case between
Novell and SCO that will resolve the matter, and IBM has no
standing to challenge it." (Opp'n at 50). However, an accused
infringer may challenge the alleged copyright holder's ownership of
copyrights, even where (as here) the copyright holder is claiming
ownership through assignment from a third party.15 See, e.g.,
Schiller & Schmidt, Inc. v. Nordisco Corp., 969 F.2d
410, 413 (7th Cir. 1992); Pannonia Farms, Inc. v. USA Cable,
No. 03-7841, 2004 WL 1276842, at *5 (S.D.N.Y. June 8, 2004)
(Addendum J hereto); Positive Black
27
Talk, Inc. v. Cash Money Records, Inc., No. 02-0425,2003
WL 1522941, at *2-3 (E.D. La. Mar. 20, 2003) (Addendum K hereto);
Bieg v. Hovnanian Enter., Inc., 157 F. Supp. 2d 475, 479-80
(E.D. Pa. 2001).
In any case, IBM is entitled to point out SCO's lack of proof of
ownership. As stated, SCO (not IBM) bears the burden to establish
its claim of copyright infringement, including ownership of a valid
copyright. See Sem-Torq, 936 F.2d at 854 (holding
that plaintiff with invalid registration bore burden of proving
ownership); Brown, 2006 WL 2059606, at *1 (same);
Shea, 2003 WL 881006, at *4 (same); Tuff 'N' Rumble,
1997 WL 158364, at *2 (same). Thus, to avoid summary judgment, SCO
must adduce admissible evidence of ownership. SCO cannot hide
behind an alleged lack of standing to avoid summary judgment.
3. SCO Transferred Any Rights It Had to UnitedLinux.
Finally, SCO contends that it did not transfer its intellectual
property rights in the
SECTION REDACTED
(Opp'n at 51.) According to SCO, "the UNIX technology at issue
falls into neither of these categories". (Id.) Moreover, SCO
argues that, even if the
SECTION REDACTED
(Id. at 52.) None of these arguments bears scrutiny.
28
First, contrary to SCO's contention, the JDC does not
assign to UnitedLinux the
SECTION REDACTED
Furthermore, by specifically defining the term
SECTION REDACTED
Thus, as stated in IBM's opening brief, the
SECTION REDACTED
Second, SCO argues that "the JDC only required the
parties to assign to the LLC 'intellectual property rights in the
Software ... developed pursuant to the JDC'", and that the
29
SECTION REDACTED
(Opp'n at 52.) However, the above-quoted text of the JDC makes
clear that
SECTION REDACTED
There is no question SCO Linux 4.0 is
SECTION REDACTED
For example, in a November 19, 2002 press release, SCO announced
that "SCO Linux 4.0 is based on UnitedLinux 1.0, the core
standards-based Linux operating system co-developed in an industry
initiative to streamline Linux development and certification around
a global, uniform distribution of Linux". (IBM Ex. 622.) In
internal documents, SCO developers acknowledged that "
SECTION REDACTED
The mere fact that some or all of the 2.4 kernel may have
predated SCO Linux 4.0 does not mean that
SECTION REDACTED
If the term
SECTION REDACTED
then sections of the JDC assignment provisions would be rendered
superfluous. As stated, the JDC
SECTION REDACTED
If SCO were correct that
SECTION REDACTED
would be rendered superfluous because SCO's reading of the
30
SECTION REDACTED
would necessarily exclude such materials from assignment.
Because it is black-letter law that one provision of a contract
cannot be read so as to render another provision superfluous, SCO's
reading of the phrase "developed pursuant to the JDC" must be
rejected. See Kraatz v. Heritage Imports, 71 P.3d
188, 196 (Utah App. 2003); Chase v. Scott, 38 P.3d 1001,1006
(Utah App. 2001).
Third, SCO argues that the
SECTION REDACTED
because the assignment provisions of the JDC provide that
SECTION REDACTED
(Opp'n at 52.) But SCO took the opposite position with respect
to language that is much less clear. In its opposition to a motion
to dismiss filed in the case of The SCO Group. Inc. v. Novell,
Inc., No. 04-00139, 2004 WL 4737297 (D. Utah June 9,2004)
(Addendum O hereto), SCO took the position that language in
SECTION REDACTED
Accordingly, even if Novell transferred the UNIX copyrights to
Santa Cruz (such that Santa Cruz could sell them to SCO), SCO
cannot prove ownership of the copyrights as to the
SECTION REDACTED
at issue because it
SECTION REDACTED
Moreover, SCO's argument fails because it is inconsistent with
the
SECTION REDACTED
In addition to
SECTION REDACTED
31
SECTION REDACTED
SCO received a license to the "Software" developed by
UnitedLinux under this license provision.
SECTION REDACTED
Thus, the plain language of the JDC and SCO's conduct itself
clearly demonstrate that the JDC effected a transfer of any rights
SCO had to the Disputed Code.20 Accordingly, there is no genuine issue
that SCO transferred all of its rights to the Disputed Code as part
of the JDC.
III. IBM HAS ONE OR MORE LICENSES TO THE DISPUTED
CODE.
SCO does not dispute that the existence of a license to use an
allegedly infringed work is a defense to a claim of copyright
infringement. Nor, by and large, does it dispute that the plain
language of the agreements and licenses at issue (including (A) the
SCO/IBM Strategic Business Agreement, (B) the General Public
License, (C) the X/Open "Spec 1170" license, and (D) the TIS
Committee ELF material license), confers broad licenses on IBM.
Rather, SCO asserts a hodgepodge of arguments as to why there is a
fact question as to the applicability of the licenses to IBM's
alleged conduct. None of the arguments is supported by the evidence
of record. In fact, some of them are contradicted by SCO's own
prior arguments. Thus, SCO's opposition papers are no impediment to
the entry of summary judgment.
32
A. IBM Has a License Under the Strategic Business
Agreement.
As set out in IBM's opening brief, in 1999, SCO granted IBM a
license under the parties'
SECTION REDACTED
materials included in SCO's Linux products. (DJ Br. at 79.)
Specifically,
SECTION REDACTED
SCO does not dispute IBM's interpretation of the plain language
of the agreements, but asserts four arguments to avoid
it—all without merit.
First, SCO argues that, "even if the
SECTION REDACTED
because Caldera Systems, in 1999, "was not in the chain of title
that granted copyrights from Bell Labs to SCO", and therefore did
not have the right to license UNIX.22 (Opp'n at 67.) That is wrong. Whether
Caldera owned UNIX copyrights in 1999 is immaterial. Caldera had
rights to its Linux products and granted IBM a license to those
products, including the
SECTION REDACTED
specifically warranting that
SECTION REDACTED
33
SECTION REDACTED
"[L]icenses are considered as nothing more than a promise by the
licensor not to sue the licensee", Hilgraeve Corp. v. Symantec
Corp., 265 F.3d 1336,1345 (Fed. Cir. 2001), which may bar the
licensor from bringing suit against the licensee even if the
subject matter of the license was acquired after the license
was entered into, see 3M Innovative Prop. Co. v. Barton
Nelson, Inc., No. 02-3591, 2003 WL 22989077, at *2-4 (D. Minn.
Dec. 12, 2003) (holding that defendant's license included rights to
plaintiffs patents that were applied for, and issued, after the
license was executed) (Addendum P hereto).23 Moreover, SCO itself
SECTION REDACTED
Equity has long held that when a party claims to have granted
rights to material without the actual right to do so, but then
later comes to acquire the predicate rights to have performed the
earlier transaction, equity will construe the earlier transaction
as having been successfully made.25
34
Second, SCO argues that the
SECTION REDACTED
SCO points to language in the
SECTION REDACTED
(Id.) It may be true that IBM served as a conduit through
which SCO sold its OpenLinux software to end users and that the
SECTION REDACTED
But neither of these propositions means that IBM did not acquire
a license to SCO's Linux products, including the Linux
Code.27
Under the plain language of
SECTION REDACTED
IBM received a broad license to the
SECTION REDACTED
Because the plain language of the
SECTION REDACTED
is unambiguous, the Court need look no further.
Third, SCO argues that the
SECTION REDACTED
According to SCO,
SECTION REDACTED
SCO offers no evidence to support its assertion that
SECTION REDACTED
SCO has also not adduced any admissible
35
evidence that
SECTION REDACTED
Any time a party promotes a product, it is in that party's
interest to have broad rights to it. That is especially so with
respect to open-source software. Moreover,
SECTION REDACTED
Here again, the plain language of the
SECTION REDACTED
controls.
Fourth SCO contends
SECTION REDACTED
(Opp'n at 68.) Thus, says SCO, "[t]he SBA is,
SECTION REDACTED
While the
SECTION REDACTED
SCO offers no support for its attempted narrowing of IBM's
license. The law is clear that a court cannot read limitations into
a contract. See Phillips Petroleum Co. v. Lujan, 951
F.2d 257, 260 (10th Cir. 1991) ("We will not read a limitation into
a lease provision which was not part of the agreement between the
parties.") (citations omitted). Moreover, the
SECTION REDACTED
Thus it is clear that the
SECTION REDACTED
36
B. IBM Has a License Under the GPL.
IBM also demonstrated in its opening brief that SCO granted IBM
a license to the Linux Code pursuant to the GPL. (DJ Br. at 80.)
SCO distributed its Linux products, which include the Linux Code,
under the GPL. The GPL provides that a person receiving code under
the GPL "may copy and distribute verbatim copies of the Program's
source code" and "modify [its] copy or copies of the Program or any
portion of it". (IBM Ex. 128 §§ 1,2.) Thus, independent
of the license SCO granted IBM under the SBA, IBM received a
license from SCO under the GPL that precludes SCO's claims of
infringement.
SCO does not contest that it distributed the Linux Code pursuant
to the GPL. But it nevertheless offers three reasons, each without
merit, why SCO's distribution of the code under the GPL did not
grant IBM a license.
First, SCO argues that its "distribution of OpenLinux did
not grant IBM a license to the disputed code" because "in order to
license code under the GPL, the copyright holder must place a
notice on the code saying it may be distributed under the terms of
the GPL", and "[t]he true copyright holder, SCO, never contributed
any of the System V code at issue under the GPL". (Opp'n at 68
(emphasis added).) SCO misses the point. Whether SCO "contributed"
System V code to Linux is irrelevant. The GPL expressly applies to
"any program or other work which contains a notice placed by the
copyright holder saying it may be distributed under the terms of
this General Public License". (IBM Ex. 128 § 0.) Even if it
were true that SCO "contributed" to Linux none of its purportedly
proprietary System V code (which SCO has not established), SCO
indisputably distributed its own program, SCO Linux Server 4.0,
under the GPL by placing GPL notices on that program. (IBM Ex. 176
¶ 13; IBM Ex. 226 ¶ 10; IBM Ex. 617 at SCO 1186816 (CD
filename: "COPYING"); IBM Ex. 221 ¶¶ 22-26, 77-78.) As a
result, IBM and all other SCO Linux users have a license to that
SCO program, including its source code, which IBM and
37
all other Linux users may copy, modify and distribute under the
GPL. (See IBM Ex. 128 §§ 0-2.)
Second, SCO argues that "the GPL is clear that
distributing one program under the GPL does not bring other
programs under the GPL" and that "SCO's distribution of some code
under the OpenLinux brand, even if it was distributed under the
GPL, cannot mean mat IBM obtains a license to all the code
distributed as OpenLinux". (Opp'n at 69, f 98.) Once again, SCO
ignores the fact that it distributed SCO Linux, and the
SECTION REDACTED
under the GPL.
SECTION REDACTED
Moreover, by selectively quoting GPL Section 2 in paragraph 98
of its memorandum, SCO again confuses the issue. Section 2 of the
GPL provides, in relevant part not quoted by SCO: "These
requirements apply to the modified work as a whole. If identifiable
sections of that work are not derived from the Program, and can
be reasonably considered independent and separate works in
themselves, then this License, and its terms, do not apply to
those sections". (IBM Ex. 128 § 2 (emphasis added).) SCO,
however, offers nothing other than the ipse dixit of its
lawyers —€”not one shred of evidence
—€in support of the proposition it asks the Court to
accept: namely, that the
SECTION REDACTED
in SCO's OpenLinux program "can be reasonably considered
independent and separate works in themselves" and thus have not
been distributed under the GPL. Indeed, SCO cannot support its
claim because, as IBM explained in its opening brief and elsewhere,
SCO indisputably distributed its SCO Linux 4.0 powered by
UnitedLinux and OpenLinux Asia 3.1.1 under the GPL. (See DJ
Br. at 79-80; DJ Br. ¶¶ 207-210; IBM Brief in Support of
Opp'n to SCO's Motion for Summary Judgment on Sixth, Seventh &
Eighth Counterclaims at ¶¶ 12-17; IBM Ex. 221
¶¶ 25-26, 77, 113-115; IBM Ex. 176 ¶ 13.)
Third, SCO argues that any license granted under the GPL
"is void for failure to properly mark SCO's proprietary material",
specifically because "[t]he disputed code contained in Linux 26
38
does not have the appropriate notices" and "[n]o code contained
in Linux 2.4 and 2.6 kernels attributes any code in Linux to SCO or
Santa Cruz". (Opp'n at 69.) Once again, SCO's attempt to distract
the Court fails. GPL notices on "code contained in Linux 2.4 and
2.6 kernels" or in Linux generally are irrelevant. SCO clearly
marked its own OpenLinux and SCO Linux 4.0 powered by UnitedLinux
distributions with GPL notices. (IBM Ex. 221 ¶ 26; IBM Ex. 226
¶ 10; IBM Ex. 617 at SCO 1186816 (CD filename: "COPYING").)
Thus, by operation of Section 6 of the GPL, when SCO distributed
its OpenLinux and SCO Linux 4.0 — which programs included the
disputed Linux code — "the recipient automatically receive[d]
a license from the original licensor [SCO] to copy, distribute or
modify the Program subject to these terms and conditions". (IBM Ex.
128 § 6.) IBM was one such recipient (IBM Ex. 221 ¶ 77),
and so IBM has a license to SCO's purportedly proprietary code
distributed under the GPL in SCO Linux distributions.
C. Novell and USL Granted IBM a License.
In its opening papers, IBM explained that in the early 1990s,
when Novell owned the UNIX assets, Novell "grant[ed] to X/Open a
non-exclusive, perpetual, world-wide, royalty-free, paid-up,
irrevocable license [sic] to prepare derivative works and to use,
execute, reproduce, display and perform" Spec 1170. (IBM Ex. 437
¶ 1.) X/Open, in turn, granted IBM, "a nonexclusive,
perpetual, world-wide, royalty-free, paid-up, irrevocable license
to prepare derivative works and to use, execute, reproduce, display
and perform [Spec 1170] and such derivative works". (IBM Ex. 437
¶ 4.) Moreover, USL granted IBM a separate license to the
material in Spec 1170 pursuant to the Common API Materials
Cross-License Agreement.
SECTION REDACTED
SCO's arguments against these two licenses lack merit.
39
First, as to Spec 1170, SCO first argues that it "only
governs the use, copying, and creation of derivative works related
to the Specification itself... Nothing in this agreement authorizes
Linux, as a non-licensee operating system, to copy the information
from the Specification". (Opp'n at 70.) Thus, the argument seems to
go, the license Novell granted to the specification allowed the
exercise of some rights but did not allow licensees to comply with
the specification. Putting aside the fact that this argument is at
odds with the purpose of creating a specification (i.e., to
promote compliance with it), it runs counter to the plain language
of the agreement, under which IBM received "a non-exclusive,
perpetual, world-wide, royalty-free, paid-up, irrevocable license
to prepare derivative works and to use, execute, reproduce,
display, and perform [Spec 1170] and such derivative works". (IBM
Ex. 437 ¶ 4.)
SCO also argues that IBM does not have a license to the code in
Spec 1170 because the Spec 1170 license "did not grant, and in fact
explicitly excluded, any grant of copyright in the intellectual
property contained in the specification". (Opp'n at 70.) Here
again, SCO confuses the difference between a grant of copyright and
a license. IBM does not contend that Novell granted it the
copyrights in Spec 1170; rather, IBM contends, and showed in its
opening brief, that Novell granted it a broad license to Spec 1170
and derivative works.29 (IBM Ex. 437 ¶ 4.) Notably, Novell,
which granted IBM the license in question, has offered unrebutted
testimony that "Novell granted IBM and others a right to use the
files specified in SPEC 1170, including the Single Unix
Specification (SUS)". (IBM Ex. 238 ¶ 9.)
Second, with regard to the API Cross-license Agreement,
SCO argues that IBM's license is limited to "licensed UNIX variants
of HP, IBM, and Sun" and does not apply to a non-licensed
40
UNIX-based operating system. (Opp'n at 71.) In fact, however,
the Common API Materials Cross-License Agreement grants a license
for any "release of a UNIX-based operating system" to use the
material required by the specification.30 (IBM Ex. 482 at §
3.10(a)(i).) SCO cites no language to support its claim that the
scope of the license was limited to AT&T-licensed operating
systems because no such language exists. (See Opp'n at 71.)
Even if, as SCO contends, the license were limited to a "UNIX-based
operating system", SCO itself argues that Linux is a UNIX-based
operating system. SCO claims that the Novell-TIS license (discussed
below) does not confer rights to Linux because it "explicitly
limited its scope to non-UNIX systems", and Linux is a UNIX-based
system. (Opp'n at 73.) Taking SCO at its word, Linux is within the
scope of the API Cross-License, giving IBM a license to use in
Linux the X/Open specification material from Spec 1170 and
derivative specifications such as the SUS.
SCO also argues that "IBM's motion for summary judgment on the
API Agreement must be denied because there are fact issues
regarding whether the agreement remains in effect". (Opp'n at 71.)
SCO acknowledges that IBM's license survives termination of the
Agreement pursuant to § 7.4, but says "there is language in
this copy of the agreement that suggests it is not the final
draft", as it is "unsigned and the signature page may relate to a
different version of the agreement". (Opp'n 71-72.) Despite SCO's
efforts to raise the specter of a fact question, there is no
question that the agreement was signed and that IBM's license
survived termination, as illustrated by a signed 1994 amendment to
this agreement adding the Open Software Foundation
41
(OSF) as an additional party to the agreement and reciting the
same license language relied upon by IBM in its opening brief. (IBM
Ex. 626 at SCO1289792-95.)
D. The TIS Committee Granted IBM a License.
Finally, IBM received a license to the
SECTION REDACTED
from the TIS Committee. The TIS Committee granted IBM and others
a license to use the information in these standards or
specifications, from which all of the
SECTION REDACTED
has been implemented. The first sentence following the cover
page of these specifications states: "The TIS Committee grants you
a nonexclusive, worldwide, royalty-free license to use the
information disclosed in the Specifications to make your software
TIS-compliant; no other license, express or implied, is granted or
intended hereby". (IBM Ex. 438 at inside cover; IBM Ex. 439 at i.)
SCO argues that IBM does not have a license to ELF under this TIS
Specification for five reasons, but none has merit.
First, SEC argues that "Novell never transferred a
license to the TIS Committee to copy or create derivative works of
the
SECTION REDACTED
only portions of the TIS Specification as contained in the
SVABI", and thus "[t]he Novell letter grants no rights to use or
copy the disputed
SECTION REDACTED
contained in Linux". (Opp'n at 72.) As with respect to Spec
1170, SCO's opposition depends on the proposition that the TIS
specification was intended to exist in a vacuum. (Opp'n at 72.) SCO
argues that although licensees were permitted under the plain
language of the Novell-TIS license to "use", "publish" and
"sublicense" the specification, they were not permitted actually to
comply with the specification. (Id.: IBM Ex. 569 at SCO1818388.)
SCO's argument defies the plain language of the agreements and a
common sense understanding of why specifications exist.31 Nothing in
SCO's opposition papers justifies
42
ignoring the plain language of the license. Moreover, Novell has
stated that it "granted IBM and others a worldwide license to
use the information disclosed in the TIS Specification to
make its software TIS-compliant". (IBM Ex. 238 ¶ 7 (emphasis
added).) SCO is in no position credibly to dispute this, just as it
is in no position to dispute Novell's unrefuted testimony that it
granted IBM a license pursuant to the Common API Materials
Cross-License Agreement.
Second, SCO contends that the license is void for
"exceeding the scope of the grant in the Novell letter" because the
license to TIS "explicitly limited its scope to non-UNIX systems",
which, says SCO, disqualifies Linux. (Opp'n at 72-73.) Since the
Novell-TIS letter contains a restriction that the TIS Specification
may not be used as a substitute for the USL ABI documents, such as
the SVABI, SCO reasons that the Novell-TIS license only allowed the
TIS Committee to license ELF to non-UNIX operating systems like
Windows.32 (Id.) However, nothing in the plain
language of the letter license supports SCO's limitation.
(See IBM Ex. 569.) The broad license contained in the
Novell-TIS letter is more than enough to allow the TIS Committee,
in the TIS Specifications, to grant IBM the right to use the
disputed
SECTION REDACTED
which is "disclosed in the specifications." (IBM Ex. 438 at
inside cover; IBM Ex. 439 at i; IBM Ex. 569.) Moreover, SCO
contradicts itself by arguing both that: (1) Linux may not refer to
the
43
SVABI; and (2) Linux may not use material from the TIS
Specification because it should instead refer to the SVABI.33
Third, SCO argues that the TIS Specifications granted
licenses only to make end-user software TIS-compliant and excluded
competing operating systems from any license. (Opp'n at 73.)
However, the argument is unsupported by any record evidence, seeks
to rewrite the agreement and contradicts SCO's other arguments. The
very portion of the TIS Specification cited by SCO provides a
license "to make your software TIS-compliant". (IBM Ex. 438 at
inside cover; IBM Ex. 439 at i.) Far from stating that the TIS
Specification may not be used by a "competitive operating system",
the license provides that "[i]t is USL's understanding that...
extensions made to
SECTION REDACTED
will be worked through an open process not limited to or
favoring any operating system environment". (IBM Ex. 569 at 1
(emphasis added).) This plain language is confirmed by Novell:
"[i]t was Novell's understanding and intent at the time [the TIS
Specification] license was granted that it would make the
SECTION REDACTED
freely available to everyone, regardless of their possession of
a UNIX license". (IBM Ex. 238 ¶ 7.) Moreover, SCO elsewhere
argues that the TIS Specifications can only be used by
competing non-UNIX operating systems such as Windows.34 (Opp'n at
73.)
Fourth, SCO claims that the TIS Specifications required a
copyright attribution to USL, and because there is no attribution
in Linux, and only a "vague" attribution in the Specification, the
use of
SECTION REDACTED
in Linux is void. (Opp'n at 73.) SCO misreads the Novell-US
license
44
agreement's requirement that the TIS Specification itself
include a copyright attribution to USL for use of the ELF standard.
(Id.) The license reads, in relevant part, "[t]he
information contained in the USL ABI documents may be used by
the TIS Committee providing USL is given appropriate copyright
recognition". (IBM Ex. 569 at 1 (emphasis added).) Accordingly,
Linux is not required to provide an attribution to USL — only
the TIS Committee is required to do so. (See id.)
Furthermore, to the extent that SCO argues that the TIS
Specifications are void because they contain only a "vague"
attribution of copyright, the Specifications show
otherwise:35 (1)
SECTION REDACTED
Fifth, SCO argues that even if IBM has a license to the
material contained within the TIS Specification, Linux includes
material not included in that specification, which SCO
concludes
SECTION REDACTED
This argument falls flat because SCO cites no evidence to
support its assertion tha
SECTION REDACTED
Moreover, the TIS-Novell license grants the TIS Committee a
license to all
SECTION REDACTED
IBM Ex. 569 at 1.)
45
Since the TIS-Novell license grants the TIS Committee a license
to all
SECTION REDACTED
and the TIS Specification refers to the SVABI where it does not
copy directly from the SVABI's text, IBM has a license to the ELF
material, even if it is not literally contained in the TIS
Specifications. (See IBM Ex. 569; IBM Ex. 438; IBM Ex.
439.)
IV. SCO'S CLAIMS ARE FORECLOSED UNDER THE DOCTRINES OF
ESTOPPEL, WAIVER AND ABANDONMENT.
SCO does not dispute that a copyright holder can be estopped
from asserting (or be found to have waived or abandoned) a claim of
infringement. Nor does SCO dispute the essential facts on which IBM
relies in support of this portion of its motion. It is undisputed
that SCO promoted Linux for nearly a decade before suing IBM. (DJ
Br. ¶¶ 88-102, 111-23.) SCO repeatedly urged IBM and
others, in its marketing materials and SEC filings, to use and rely
on Linux, including the very materials SCO now claims infringe its
alleged copyrights. (DJ Br. ¶ 97.) Some of the Linux Code is
in Linux as a result (in part) of SCO's efforts to bring Linux into
compliance with the Linux Standard Base ("LSB"). (DJ Br. ¶
61.) Moreover, as part of its
SECTION REDACTED
Like most of its opposition brief, SCO's response is merely an
exercise in diversion; none of its arguments bear scrutiny.38
46
A. SCO's Misconduct Is Not Beyond the Equitable Power of the
Court.
As an initial matter, SCO seeks to avoid summary judgment by
arguing that estoppel is not susceptible to summary adjudication
because: (1) the defense of equitable estoppel requires a
fact-intensive inquiry; and (2) equitable estoppel is "not a legal
basis upon which summary judgment of non-infringement may be
awarded". (Opp'n at 74-75.) SCO is wrong.
First, while equitable estoppel can be fact-intensive and
is not appropriate for summary judgment in all cases, it is
appropriate for summary judgment where, as here, the only material
facts are not in dispute. Numerous courts have found estoppel at
summary judgment on no more compelling facts. See, e.g.,
Buckward Digital Servs., Inc v. Millar Instruments, No.
05-1728. 2006 WL 1118003, at *4 (S.D. Tex. Apr. 26, 2006) (DJ Br.
Ex. I); Field v. Google Inc., 412 F. Supp. 2d 1106,1117 (D.
Nev. 2006); DeCarlo v. Archie Comic Pub., Inc., 127 F. Supp.
2d 497, 511 (S.D.N.Y. 2001); Keane Dealer Services, Inc. v.
Harts, 968 F. Supp. 944, 948 (S.D.N.Y. 1997); Armento v.
City of Ashville Downtown Dev. Office, No. 94-57, 1996 WL
677119, at *8 (W.D.N.C. Mar. 26, 1996) (Addendum R hereto);
Wafer Shave, Inc. v. Gillette Co., 857 F. Supp. 112, 127 (D.
Mass. 1993); Hadady Corp. v. Dean Witter Reynolds, Inc., 739
F. Supp. 1392, 1400 (C.D. Cal. 1990); Jamesbury Corp. v. Litton
Indus. Products, Inc., 646 F. Supp. 1495, 1501-02 (D.Conn.
1986).39
Second, the Court may, contrary to SCO's contention,
enter a declaration of noninfringement based on estoppel. (Opp'n at
75-76.) A plaintiff threatened with an infringement
47
action may assert a claim for a declaratory judgment of
non-infringement based on equitable estoppel. See, e.g.,
Minebea Co., Ltd. v. Papst, 444 F. Supp. 2d 68, 202 (D.D.C.
2002) (holding that the "[c]ourt rejects Papst's argument that
Minebea may not assert a claim for equitable estoppel in a
declaratory judgment action based on a reasonable apprehension of
[a patent infringement] suit by Papst against its customers");
In re Papst Licensing, GmbH Patent Litig., Nos. MDL 1298,
99-3118, 2000 WL 1859013, at *2 (E.D. La. Dec. 19, 2000) (denying
defendant Papst's motion to dismiss plaintiff Minebea's declaratory
judgment claim that Pabst "should be equitably estopped from
asserting its patents against Minebea's customers because of
representations made by Papst to Minebea") (Addendum S hereto);
Forest Labs., Inc. v. Abbott Labs., No. 96-159, 1999 WL
33299123, at *25 (W.D.N.Y. June 23, 1999) (entering judgment on
plaintiffs claim for a declaration of equitable estoppel barring an
infringement claim) (Addendum T hereto).
Rather than cite a case to the contrary, SCO simply asserts that
"estoppel is a personal defense, to be considered in the context of
a particular defendant, that defendant's activities, and the
copyright holder's action with respect to that party".40 (Opp'n at
75.) But IBM does not seek a determination of SCO's rights as to
"the rest of the world". (Opp'n at 76.) IBM seeks a declaration
that its activities relating to the Linux kernel do not infringe
SCO's alleged copyrights. (See IBM Ex. 3 (IBM's 03/29/2004
Sec. Am. Counterclaims, at 39-40, Tenth Counterclaim).) In any
event, the mere fact that a declaration of non-infringement
(whether on
48
estoppel or other grounds) might benefit a third party does not
render it impermissible.41 SCO cannot defeat summary judgment by
imputing to IBM a position it has never taken, disputing that
position, and then arguing that there is a dispute that justifies
denial of summary judgment.42
B. IBM Reasonably Relied on SCO's Conduct to Its
Detriment.
The crux of SCO's opposition is that IBM did not reasonably rely
on SCO's Linux activities. SCO offers a handful of scattered (and
overlapping) arguments to support the point — some relating
to Caldera, some to SCO, some to Santa Cruz and some to IBM. But
most amount to a game of "where's the ball", as SCO selectively
endeavors to avoid association with its and its predecessors' past,
and all of SCO's arguments miss the mark. Not only has IBM offered
unrebutted evidence of reliance (DJ Br. ¶¶ 88-102), but
also no serious question can exist as to IBM's reliance.
1. Caldera.
SCO argues that IBM could not rely on the Linux activities of
Caldera Inc. and Caldera Systems, Inc. because they were separate
legal entities from SCO, and neither was "in the chain of title
that holds the UNIX copyrights". (Opp'n at 76-77.) By this simple
expedient, SCO seeks to render irrelevant nearly a decade of its
predecessors' Linux activities, which, if considered,
49
easily foreclose SCO's present assault on Linux. However, the
law is clear that a party is bound by the conduct of its
predecessors.43
No exception is made for avoiding the defense of estoppel.
See Keane, 968 F. Supp. at 944, 947-48 (holding that
purchaser of copyrighted program would be estopped from bringing
infringement claim because of the conduct of plaintiff's
predecessor toward the defendant); Hiland Potato Chip Co. v.
Culbro Snack Foods, Inc., 585 F. Supp. 17, 22-23 (D. Iowa 1982)
(holding that plaintiff was estopped from claiming trademark
infringement where plaintiff's predecessor issued a "public
declaration of discontinuance of a trademark"); Dymo Indus.,
Inc. v. Monarch Marking Sys., Inc., 474 F. Supp. 412, 418-19
(S.D. Tex. 1979) (finding estoppel barred patent infringement claim
based on conduct of plaintiff's predecessor).44
Moreover, just as
SECTION REDACTED
owning the UNIX copyrights (see Section III.A. above), it
could engage in conduct giving rise to a basis for estoppel without
owning the copyrights. Estoppel is a docnine of equity which is
50
applicable to non-copyright owners.45 Notably, SCO does not cite a
single case for the proposition that SCO is not bound by Caldera's
conduct because Caldera did not own the copyrights. (See
Opp'n at 76-77.) If SCO's theory were correct, then even today it
could transfer its alleged UNIX assets to another legal entity and
avoid all of the consequences of its prior conduct. Estoppel is not
a rigid defense easily frustrated by a legal shell game.
2. SCO.
Despite the fact that it purports to have owned the UNIX copyrights
as of 2001, SCO contends that its Linux activities are irrelevant
because "its initial decision to continue with a Linux strategy was
not unreasonable"; in late 2002 it proceeded to investigate whether
Linux infringed its alleged copyrights; and "upon discovering a
legal basis", SCO commenced this action. (Opp'n at 79-80.) SCO
misses the point.
Whether or not it was reasonable for SCO to continue a Linux
strategy, it was plainly unreasonable for SCO to reverse course
after nearly a decade of support for Linux and attack it. Moreover,
during the nearly four years that elapsed between the investigation
that underlay the Swartz memo46 and the commencement of this case, SCO
(and Santa Cruz before it) contributed
51
to, supported, distributed, promoted and evangelized Linux,
knowing that it contained the very code about which SCO now
complains. Specifically, SCO:
- invested heavily in Linux as a business solution (DJ Br. ¶
24);
- designed its Linux products to be compliant with certain UNIX
standards, including the X/Open brand for UNIX 95 and the POSIX.1
specification and delivered them to market (DJ Br. ¶¶ 25,
42-43);
- touted its Linux products and services in extensive advertising
(DJ Br. ¶ 76);
- helped and encouraged independent software vendors and
manufacturers to move their programs to Linux (DJ Br. ¶
28);
- worked to achieve UNIX certification for Linux (DJ Br. ¶
33);
- represented to the market that its Linux products were "an
inexpensive alternative to UNIX-based systems", and "a complete
networking solution" for "small- to medium-sized businesses and
enterprises" (DJ Br. ¶ 48);
- persuaded the Linux community to include some of the allegedly
infringing code in the Linux kernel (DJ Br. ¶ 50);
- championed the standardization of Linux, as the first corporate
signer of the 1998 document proposing the Linux Standard Base (DJ
Br. ¶¶ 53-56);
- contributed to the Linux and Open Source community by, among
other things, being "among the very first Linux distributors to
work with commercial developers, promoting the porting of many
important software works to Linux"; and "continu[ing] to provide
manpower and funding to vendor-neutral initiatives such as Linux
Standard Base and the Linux Professional Institute" (DJ Br. ¶
78);
- offered Linux technical training, certification and support
throughout the world (DJ Br. ¶ 79).
Again, much of the allegedly infringing material is in Linux
because of SCO.47 (DJ Br. ¶ 74.
52
3. Santa Cruz.
SCO seeks to distance itself from Santa Cruz's Linux activities
on the grounds that Santa Cruz "was not involved in any Linux
distribution or promotion" and did not assure IBM that Linux was
non-infringing. Inaction, says SCO, does not constitute estoppel.
(Opp'n at 77.)
Whether or not Santa Cruz was "involved in any Linux
distribution or promotion" or gave IBM "assurance" that "Linux was
non-infringing", it engaged in Linux activities that easily create
a basis for estoppel. For example, it is undisputed that Santa
Cruz:
- developed technologies to provide interoperability between
Linux and its UnixWare and OpenServer operating systems (DJ Br.
¶ 41);
- publicly supported the Linux standardization movement and
encouraged the adoption of the Linux Standard Base (DJ Br. ¶
59-60);
- developed a program called lxrun, which permitted Linux ELF
binaries to run on UNIX systems (DJ Br. ¶ 69);
- took part in a Linux development effort called 86Open in which
it successfully advocated for the ELF implementation as the de
facto standard for Linux (DJ Br. ¶ 70);
- announced to its OEMs and partners that it was developing a
Linux distribution for servers (DJ Br. ¶ 87);
- took people who were experienced in writing UNIX code and put
them to work writing code for Linux (id.);
- continued to make contributions to various open source
projects, including to the GNU C compiler collection and other open
source components found in Linux (id.);
- offered a free Open Source Software Supplement CD that included
many Open Source technologies and a comprehensive set of Linux and
Open Source-related professional services for use in its UNIX
products (id.).
Thus, SCO's claim that inaction does not constitute estoppel is
beside the point. Even if (contrary to fact) Santa Cruz had been
silent about Linux, silence or inaction (such as a failure to sue)
can give rise to a basis for estoppel where, as SCO acknowledges
53
(Opp'n at 77), the party to be estopped has a duty to speak.
See DeCarlo, 127 F. Supp. 2d at 510 (holding that
"[s]ilence or inaction in the face of an explicit contrary
assumption by the opposing party may be sufficient to induce
justifiable reliance by a defendant that a plaintiff will not later
assert a claim"); Keane, 968 F. Supp. at 947 (holding that
where plaintiff "knew of defendant's use of the [infringing]
software", "Lehman's silence in the face of this knowledge ...
constitutes conduct on which Smith Barney was entitled to rely").
SCO cannot credibly contend that Santa Cruz did not have a duty to
disclose the alleged infringement to IBM. SCO claims that Santa
Cruz owned the UNIX copyrights. And Santa Cruz was IBM's partner in
the development of "AIX 5L", which was a platform that was designed
to have "Linux affinity... offer[ing] a flexible environment
enabling Linux applications to run on AIX 5L". (IBM Ex. 628 (SCO
Press Release, "SCO and Caldera Release Technology Preview of AIX
5L", April 23, 2001).) Indeed, the "L" in AIX 5L stood for Linux.
(See IBM Ex. 629.)
What is more, as stated in IBM's opening brief, Santa Cruz
investigated whether Linux infringed the UNIX copyrights,
SECTION REDACTED
According to SCO's Blake Stowell, the
SECTION REDACTED
(DJ Br. ¶ 86.) Yet Santa Cruz, and later SCO, continued to
support and promote Linux. SCO discusses the Swartz memo only in a
footnote and even then states only
SECTION REDACTED
The fact that some at Santa Cruz did not believe Linux infringed
the UNIX copyrights (properly, we submit) does not justiry Santa
Cruz's (and later SCO's) inaction, let alone its continued support
and promotion regarding Linux in the face of the red flags raised
by the Swartz memo.
54
4. IBM. Lastly, SCO argues that IBM could not reasonably
rely on the Linux activities of SCO and its predecessors because
IBM engaged in "deceptive and unfair activity with respect to
Project Monterey" and made "improper contributions to Linux" that
changed its "competitive nature". (Opp'n at 78, 81-83.) To begin,
these allegations fail because they are not supported by admissible
evidence. As stated in IBM's other summary judgment memoranda,
which are incorporated by reference, IBM did not engage in any
misconduct relating to Project Monterey. Nor has IBM ever made any
improper contributions to Linux. Moreover, even if IBM had breached
its contractual obligations to SCO in connection with Project
Monterey, or in making contributions to Linux, a mere breach of
contract does not amount to unclean hands so as to foreclose IBM's
reliance on the defense of estoppel.48 See Dollar Sys., Inc. v.
Avcar Leasing Sys., Inc., 890 F.2d 165, 173 (9th Cir. 1989)
(holding that "simple breach of contract" did not "merit[]
application of the unclean hands doctrine."); Energetec Sys.,
Inc. v. Kayser, No. 84-10611, 1986 WL 8058, at *2 (N.D. Ill.
July 17,1986) (holding that the "defense of unclean hands is shown
by misconduct... which amounts to fraud, misconduct or bad faith
toward the defendant making the contention" and "[m]ere breach of
contract does not supply the requisite tortious conduct.")
(Addendum W hereto).
55
Furthermore, allegations of unclean hands — which is what
SCO's Monterey allegations amount to — are recognizable only
if they "relate directly to the transaction concerning which the
complaint is made". Dollar Sys., 890 F.2d at 173 (emphasis
added).49 Some courts have even held that the
"direct relation" must be such that the plaintiff engaged in
conduct that either caused, or brought about, the very transactions
upon which it is bringing suit. See, e.g., McFadden v.
R&R Engine & Machine Co., 102 F. Supp. 2d 458, 471
(N.D. Ohio 2000) (rejecting unclean hands defense where defendant's
"failure of timely payment was not caused by, nor is it excused by,
any alleged failure of" plaintiff).50 Here, SCO's Monterey allegations bear
no relationship, let alone a direct relationship, to its
allegations of infringement relating to IBM.
SCO also argues that IBM could not have relied on SCO's
predecessors' Linux activities because "IBM committed to a Linux
strategy long before 2001", and "[i]n 2003, after it was sued, IBM
continued with its Linux activities notwithstanding full knowledge
of SCO's position". (Opp'n at 79.) SCO offers no evidence to
support these assertions and there is none.
56
IBM did not make a single commitment to Linux; rather, it has
made a series of commitments to Linux over time. Moreover, IBM did
not have full knowledge of SCO's position when SCO sued IBM in
2003. As this Court recognized in an order dated February 22, 2005,
more than two years into this litigation, SCO still had not
revealed a shred of competent evidence of its claims as of that
time. As the Court put it:
Viewed against the backdrop of SCO's plethora of public
statements concerning IBM's and others' infringement of SCO's
purported copyrights to the UNIX software, it is astonishing that
SCO has not offered any competent evidence to create a disputed
fact regarding whether IBM has infringed SCO's alleged copyrights
through IBM's Linux activities. (IBM Ex. 57 at 10.)
While IBM might have first embraced Linux in 1999, it re-committed
itself to Linux on an ongoing basis up to and through the
commencement of this case without any specific knowledge of SCO's
present claims, and based on SCO's
SECTION REDACTED
In any case, notice of SCO's claims based on this litigation
could not possibly make IBM's continued support of Linux
unreasonable. Once a defendant has established detrimental reliance
based on the plaintiffs conduct, the defendant's continued actions
even after receiving notice that the plaintiff intends to assert
its rights do not negate or undermine that detrimental reliance and
do not preclude a finding of estoppel because the damage has
already been done.51
57
Contrary to SCO's suggestion, the mere fact that a defendant
could abandon the allegedly infringing activity altogether does not
mean that the plaintiff should not be estopped. SCO's promotion of
Linux and delay in asserting its claims led IBM and others to make
commitments to Linux that cannot be undone absent extreme
prejudice.52 The fact that IBM stayed committed to
Linux despite SCO's legal warfare is proof of IBM's reliance.
C. IBM Was Ignorant of the Fact That SCO Would Assert Claims
to Linux.
Finally, SCO argues that IBM is not entitled to summary judgment
as to its estoppel defense because it was not ignorant of the true
facts. (Opp'n at 84-86.) According to SCO, IBM knew that Santa Cruz
held UNIX System V copyrights and that unauthorized UNIX System V
technology was incorporated into Linux. (Id. at 84.) No
evidence supports the claim that IBM knew that Santa Cruz held the
UNIX System V copyrights or that IBM knew that UNIX System V
technology might have been incorporated into Linux.
As stated, SCO does not own the copyrights in the Disputed Code.
(See Section II.B., above.)
SECTION REDACTED
58
SECTION REDACTED
In any case, assuming that SCO owned UNIX copyrights is not the
same thing as knowing that it would use them to wage legal warfare
against the very operating system that it helped to build and the
very code that it helped to include in Linux. Furthermore, as
demonstrated above, SCO transferred any ownership it had
SECTION REDACTED
In addition, the evidence offered in support of IBM's opening
brief, which SCO fails properly to controvert, shows that IBM was
unaware of SCO's allegations of infringement (DJ Br. ¶ 162.)
IBM knew nothing of SCO's allegations about the Linux Code until
after SCO launched its attack on Linux. (DJ Br. ¶ 162.) SCO
did not specifically identify the Linux Code, despite two orders of
the Court requiring it to do so, until SCO submitted its Final
Disclosures, years after SCO commenced suit. (DJ Br. ¶¶
146-57, 170-78.) Even then, SCO failed to disclose any evidence of
unauthorized copying by IBM. (DJ Br. ¶¶ 146-57,170-78,
192-94.) Furthermore, IBM had no reason to believe that SCO
considered the Linux Code to infringe copyrights owned by SCO. (DJ
Br. ¶ 162.) Again, SCO: (1) promoted Linux; (2) advocated
adoption of the LSB, which required inclusion of most of the Linux
Code in Linux; (3) distributed a number of Linux products, despite
the fact that they included the Linux Code; and (4) granted IBM a
license to use the material.53 (DJ Br. ¶¶
22-33,42-83,88-102.)
59
V. SCO CANNOT SHOW SUBSTANTIAL SIMILARITY BETWEEN LINUX AND
PROTECTABLE ELEMENTS OF THE SYSTEM V WORKS.
IBM is also entitled to summary judgment for two additional
reasons: (1) none of the System V Code is protectable by copyright;
and (2) even if all of the System V Code were protectable by
copyright, the Linux Code is too insignificant to render Linux
substantially similar to the System V Works. SCO's opposition
papers offer no admissible evidence to the contrary.54
A. None of the System V Code Is Protectable by
Copyright.
The System V Code
SECTION REDACTED
is unprotectable, and cannot form the basis of a claim for
copyright infringement, because it is: (1) scenes a faire
material; (2) an idea, procedure, process, system, method of
operation or one of only a handful of possible expressions of the
underlying idea; or (3) unoriginal.
1. The System V Code Was Dictated bv Externalities.
SCO contends the
SECTION REDACTED
are not scenes a faire material (i.e., dictated by
externalities) (Opp'n at 59-61), but its argument suffers from two
independently fatal flaws.
First, in its opening brief, IBM showed that the System V
Code was dictated by numerous externalities, any one of which is
sufficient to render it uncopyrightable. (DJ Br. at
60
89-90.) Specifically, the System V Code was dictated by (1)
compatibility requirements, (2) industry standards, (3) programming
practice, and (4) industry demand. SCO purports to offer
SECTION REDACTED
Thus, the fact that the System V Code was dictated by
programming practices and industry demand must be deemed admitted.
See DUCivR 56-l(c).
Second,
SECTION REDACTED
It is well established that a party cannot avoid summary
judgment based on inadmissible evidence. See, e.g., Vanover
v. Altec Indus., Inc., 82 Fed. Appx. 8, 10 (10th Cir. 2003)
(Addendum Y hereto); Stover v. Eagle Prods., Inc., No.
93-4047, 1996 WL 172972, at *12 (D. Kan. Mar. 19, 1996) (Addendum Z
hereto). Where, as here, an expert uses the wrong legal standard to
arrive at his opinion, that opinion is plainly unreliable and
therefore inadmissible pursuant to Federal Rule of Evidence 702.
Carlson v. C.H. Robinson Worldwide, Inc., Nos. 02-3780 &
02-4261, 2005 WL 758601, at *4 (D. Minn. Mar. 30, 2005)
(citing Kumho Tire Co. v. Carmichael, 526 U.S. 137,
152 (1999)) (Addendum AA hereto).
Case law from this Circuit is clear that, "[i]n the area of
computer programs ... external factors may include ... target
industry practices and demands, and computer industry programming
practices". Gates Rubber, 9 F.3d at 838 (internal citations
omitted).
SECTION REDACTED
61
SECTION REDACTED
See Fed. R. Evid. 702; Carlson, 2005 WL 758601, at
*4; see also Hutton Contracting Co., Inc. v. City of
Coffeyville, No. 02-4130, 2004 WL 2203449, at *12 (D. Kan.
Sept. 24, 2004) (excluding expert testimony based on incorrect
legal standard) (Addendum BB hereto); Pioneer Hi-Bred Int'l.,
Inc. v. Ottawa Plant Food, Inc., 219 F.R.D. 135,140 (N.D. Iowa
2003) (excluding expert testimony "based on an erroneous legal
premise").
In addition to these flaws, SCO's critique of IBM's analysis of
externalities misses the mark. That is true independent of the fact
(ignored by SCO) that it (not IBM) bears the burden of proof.
First, SCO argues that IBM relied incorrectly "on
externalities that constrained the choice of expression in the
infringing, rather than infringed, work." (Opp'n at 60.) That is
incorrect. IBM showed that SCO's alleged predecessors were
constrained by external factors when developing the allegedly
infringed material from the System V Works. (DJ Br. at 89-90;
e.g., IBM Ex. 213 ¶¶ 44-58, 70-75, 88-89; IBM Ex.
214 ¶¶ 56-58, 89, 97; Ex. 215 ¶¶ 12-30, 51-57,
86-87, 99-102.)
Second, SCO argues that the fact that AT&T was
constrained when programming SVr4 by the need to maintain
compatibility with older versions of UNIX previously created by
AT&T does not constitute an externality recognized under the
doctrine of scenes a faire and IBM is wrong to argue
otherwise. (Opp'n at 60-61.) The Tenth Circuit, however, has
expressly held that material is unprotectable when it was dictated
by the need for compatibility with earlier
62
versions. Mitel, Inc. v. Iqtel, Inc., 124 F.3d 1366, 1375
(10th Cir. 1997) (plaintiff Mitel's allegedly infringed material
held to be unprotectable because it was "dictated by the need for
compatibility with older-model Mitel call controllers").
Third, SCO argues that IBM "fails to specify what
specific elements of SVr4 are dictated by externalities". (Opp'n at
61.) Here again, SCO is wrong on the facts. IBM submitted evidence
in support of its opening brief showing that all
SECTION REDACTED
are dictated by multiple externalities.
SECTION REDACTED
2. The System V Code Represents Mere Ideas or Merger
Material.
IBM's opening brief explains that the System V Code is also
unprotectable because it represents mere ideas and merger material.
(DJ. Br. at 90-92.) SCO argues there is a fact question on this
issue, but here again, fails to support the argument with
admissible evidence. SCO purports to support its argument with the
Cargill reports.
SECTION REDACTED
Moreover, even if the Cargill reports could be construed to
controvert IBM's mere idea/merger evidence, SCO could not rely on
that evidence because it was not produced pursuant to IBM's
discovery requests or the Court's orders.
63
IBM's Interrogatory No. 13 and its Interrogatory No. 16 asked
that "[f]or each line of code and other material identified ...
please state whether (a) IBM has infringed plaintiffs rights, and
for any rights IBM is alleged to have infringed, describe in detail
how IBM is alleged to have infringed plaintiffs rights" (IBM Ex. 12
at 2), and IBM's Interrogatory No. 16 asked SCO, "[f]or each line
of code and other material identified ... please state... whether
it constitutes expression protectable under copyright law" (IBM Ex.
43 at 16). The Court ordered SCO to respond in detail and with
specificity. This SCO did not do. Thus, SCO is precluded from using
this supposed evidence for all purposes, including to oppose IBM's
summary judgment motion.
SCO seeks to defend its failure to produce this information in a
footnote (Opp'n at 62 n.7), but none of the arguments it advances
survive scrutiny:
- SCO claims "it is IBM's burden to show that the protected
material should be filtered". (Id.) Putting aside the fact
that SCO bears the burden of proof on the issue of infringement,
the issue of burden is irrelevant to whether to SCO met its
discovery obligations.
- SCO claims "IBM points to no discovery that it sought on this
issue that SCO failed to respond to". (Id.) In doing so, SCO
ignores IBM's Interrogatory Nos. 13 and 16 (as stated above).
- SCO claims "IBM cites no relevant authority for its apparent
proposition" that "SCO failed to meet an obligation to provide
discovery regarding what aspects of the copied SVr4 material
constitutes expression, as opposed to mere ideas". (Id.)
Putting aside the Court's order setting a Final Disclosure deadline
and its order affirming Judge Wells' preclusion order, Rule 37(c)
and the cases cited in IBM's preclusion papers provide ample
authority for IBM's position. (IBM Ex. 58; IBM Ex. 630; Fed. R.
Civ. P. 37(c); IBM Ex. 631.) Moreover, IBM's opening brief cites
relevant authority.57
64
- SCO claims that it was allowed to defer providing this
information until the submission of its expert reports. (See Opp'n
at 62 n.7) The Court has repeatedly rejected this contention, as
recently as its order on IBM's Motion to Limit SCO's Claims to, and
Strike Expert Testimony in Excess of, SCO's Final Disclosures.
Since SCO has failed to support its argument with admissible
evidence, the fact that the System V Code constitutes mere ideas or
expression that has merged with the underlying idea must be deemed
admitted. See DUCivR 56-l(c).
SCO's specific contentions are likewise no impediment to summary
judgment.
First, SCO argues that "[a]s a matter of law, source code
is almost always considered expression rather than an idea". (Opp'n
at 62.) As SCO's own assertion concedes, source code is not always
considered expression. While many of the millions of lines of code
in the System V Works may constitute expression, the
SECTION REDACTED
are either mere ideas or merger material,
SECTION REDACTED
See, e.g., MiTek Holdings, Inc. v. Arce Eng'g. Co.,
Inc., 89 F.3d 1548, 1557 n.20 (11th Cir. 1996) (holding certain
elements of a computer program unprotectable because to grant
copyright protection to the first person to express the idea
effectively would remove those basic ideas or functions from the
public domain (citing Gates Rubber, 9 F.3d at 838));
Computer Assocs. Int'l v. Altai, Inc., 982 F.2d 692, 708 (2d
Cir. 1992) (when efficiency concerns in the computer program
context suggest that "there are only a very limited number of file
structures available", then the "expression represented by the
programmer's choice of a specific [structure] has merged with [its]
underlying ideal and is unprotect[able]" (quoting, in part 3
Nimmer on Copyright § 13.03)).58
65
Second, SCO argues that the number of different choices
available to a C programmer in
SECTION REDACTED
That may be true, but is no more meaningful than would be the
observation that there are nearly an infinite number of ways of
describing something in the English language in a literary context.
As explained in IBM's opening brief, the number of practical ways
to express the ideas claimed by SCO in the
SECTION REDACTED
are extremely limited by the need for memorable, concise
terminology. (DJ Br. at 91-92; e.g., IBM Ex. 214 ¶ 90;
IBM Ex. 213 ¶ 60.) For that reason alone, they are
unprotectable by copyright.59
Third, SCO argues that it is legally wrong to argue that
expressive choices are limited by the need for compatibility with
System V. (Opp'n at 63.) SCO's argument is, however, based on a
misconstruction of IBM's position. Contrary to SCO's suggestion,
IBM's mere idea/merger evidence is not based on the proposition
that the number of expressive choices for Linux were limited but
rather that
SECTION REDACTED
fact SCO ignores). (DJ Br. at 91-92; see e.g., IBM Ex.
213 ¶¶ 59-60, 76-77, 83-87; IBM Ex. 214 ¶¶ 59,
90; IBM Ex. 215 ¶¶ 58-64, 88, 103-104.)
66
3. The System V Code Lacks Even De Minimis
Originality.
To be protected by copyright law, a work must be the original,
creative expression of an idea, rather than an arbitrary decision.
Feist Publ'ns. Inc. v. Rural Tel. Serv. Co. Inc., 499 U.S.
340, 345 (1991). Thus, as an additional ground for summary
judgment, IBM showed in its opening brief that the System V Code
alleged to have been infringed in Linux lacks even de
minimis originality.60 (DJ Br. at 93; see also IBM Ex.
215 ¶ 65.) SCO's opposition depends entirely on
SECTION REDACTED
The Supreme Court pronounced the test for "originality" in
copyright law fifteen years ago in Feist Publications, Inc. v.
Rural Telephone Service Co., Inc., 499 U.S. 340 (1991).
Feist involved the copying of listings from a telephone
directory. Id. at 342-44. The issue before the Court was
whether the copyright holder's arrangement of facts was
sufficiently original to warrant copyright protection. Id.
at 362. The Court held that it was not:
Rural's white pages are entirely typical. Persons
desiring telephone service in Rural's service area fill out an
application and Rural issues them a telephone number. In preparing
its white pages, Rural simply takes the data provided by its
subscribers and lists it alphabetically by surname....
Rural's selection of listings could not be more obvious: It
publishes the most basic information-name, town, and telephone
number-about each person who applies to it for telephone service.
This is "selection" of a sort, but it lacks the modicum of
creativity necessary to transform mere selection into copyrightable
expression. Rural expended sufficient effort to make the white
pages directory useful, but insufficient creativity to make it
original. Id. at 362-63.
67
In so holding, the Court noted that although the originality
"does not require that facts be presented in an innovative or
surprising way", "the Constitution mandates some minimal degree of
creativity". Id. at 362.
Applying Feist, the Tenth Circuit has held that the
"arbitrary selection of a combination of three or four numbers" to
create "command codes" was insufficiently "original" to qualify for
copyright protection. See Mitel, Inc. v. Iqtel, Inc.,
124 F.3d l366, 1373-74 (10th Cir. 1997). Likewise, the Court held
that "purely sequential elements of the codes" that were "matched
with increasing incremental 'values'", were "analogous to arranging
telephone entries in alphabetical order" and therefore
insufficiently original. See id. at 1374.
SECTION REDACTED
68
SECTION REDACTED
Because Dr. Cargill used an erroneous legal standard in arriving
at his opinions regarding the originality of the allegedly copied
SVr4 code, those opinions are unreliable and inadmissible pursuant
to Federal Rule of Evidence 702. See Carlson, 2005 WL
758601, at *4; Button Contracting Co., 2004 WL 2203449, at
*12; Pioneer Hi-Bred Int'l., 219 F.R.D. at 140. Inadmissible
expert testimony cannot defeat a summary judgment motion. See,
e.g., Vanover, 82 Fed. Appx. at 10; Stover, 1996
WL 172972, at *12. Because SCO relies entirely on Dr. Cargill's
inadmissible opinions to prove that the relevant code is
sufficiently "original", SCO has failed to raise an issue of
material fact with respect to the issue of "originality".
B. Linux Is Not Substantially Similar to the System V Works,
Even Assuming the Protectability of the System V Code.
Even if all of the System V Code
SECTION REDACTED
were protectable by copyright, SCO could not show substantial
similarity between Linux and protectable elements of the System V
Works. This by itself is also fatal to SCO's claim.
While SCO's opposition makes sweeping assertions of
infringement, it fails to show that the
SECTION REDACTED
render Linux substantially similar to the System V Works. (Opp'n
at 65-67.) In fact, SCO hardly mentions the specific lines at
issue, resorting instead to a discussion of allegedly infringed
material not specifically identified in the Final Disclosures
SECTION REDACTED
(Id. at 66-67.) Again, the Court has made clear that SCO
may not rely on information not specifically
69
identified in the Final Disclosures as a means to avoid summary
judgment. As to the
SECTION REDACTED
SCO's only real argument is to suggest that a computer program
using copied code is "substantially similar" to an earlier work no
matter how little code is copied, so long as
SECTION REDACTED
test, however, leads to absurd results.
SECTION REDACTED
Even if merely criticizing IBM's opening brief were grounds to
avoid summary judgment (and it is not), SCO's opposition would be
unavailing. Contrary to SCO's suggestion, IBM's experts considered
whether Linux is substantially similar to UNIX based on the
principles set out in Gates Rubber. (IBM Ex. 213
¶¶ 2, 90-102; IBM Ex. 215 ¶¶ 31-45; DJ Br. at
94.) Gates Rubber does not, as SCO claims, render irrelevant
the "ordinary lay observer" standard described
70
in Country Kids.61 Nor does Gates Rubber forbid the
filtering of unprotectable elements before comparing two works in
whole to determine if they are substantially similar — it
commands it.62 As contemplated by Gates Rubber,
IBM's experts performed both a qualitative and quantitative
analysis to determine substantial similarity. (See, e.g.,
IBM Ex. 215 ¶¶ 31-45.) On the strength of that analysis,
they found what common sense suggests —
SECTION REDACTED
Even if SCO's complaints had merit (and they do not), they would
not be enough to avoid summary judgment. To avoid summary judgment,
SCO was required to adduce admissible evidence showing the
substantial similarity of the Linux kernel and the System V works.
See Adler, 144 F.3d at 671-72 (conclusory arguments
in plaintiff's brief are of little help in carrying burden under
Rule 56). Legal argument is not admissible evidence.
While substantial similarity can be a jury question, it is not,
as SCO suggests, necessarily a question for a jury. Courts have
entered summary judgment based on insufficient similarity (between
allegedly infringed and allegedly infringing works) in
circumstances similar to those here. See Brown Bag
Software v. Symantec Corp., 960 F.2d 1465, 1472, 1477 (9th Cir.
1992) 59
71
(affirming summary judgment dismissing copyright infringement
claim where plaintiff failed to meet its evidentiary burden on its
assertions of substantial similarity); Frybarger v. Int'l Bus.
Machs. Corp., 812 F.2d 525, 529 (9th Cir. 1987) (affirming
district court decision on summary judgment that with respect to
"the expressive elements in the works... no reasonable jury could
find them substantially similar"); Gemisys Corp. v. Phoenix Am.,
Inc., 186 F.R.D. 551, 563 (N.D. Cal. 1999) (holding that
because "Gemisys has not presented any evidence that [the Phoenix
software] is substantially similar to [the allegedly infringed
Gemisys software]... the Court grants summary judgment in favor of
Phoenix on Gemisys' copyright infringement claim"); Productivity
Software Int'l, Inc. v. Healthcare Tech., Inc., No. 93-6949,
1995 WL 437526, at *7 (S.D.N.Y. July 25, 1995) (holding that
because "[p]laintiff has not identified any basis for finding that
an average lay observer would recognize Defendants' program as
having been appropriated from Plaintiff's copyrighted work [and]
any similarity between the two programs relates only to
non-copyrightable features... Defendants' motion for summary
judgment on Plaintiff's copyright claim is granted") (DJ Br. Ex.
K). Thus, IBM is entitled to summary judgment on the grounds that
SCO has failed to meet its burden to prove substantial
similarity.
VI. SCO HAS MISUSED ITS ALLEGED COPYRIGHTS.
Finally, SCO's infringement claim should also be rejected
because SCO has misused the copyrights and therefore is not
entitled to enforce them. While SCO asserts that it has not misused
the copyrights, it does not (and could not) contest the multiple
grounds entitling IBM to a finding of misuse. For example, it is
undisputed that:
72
- SCO has specifically accused IBM of infringing, and claimed
infringement of,
SECTION REDACTED
- Without proffering support for its claims of infringement, SCO
has asserted the Copyrights against all of Linux, although it does
not, and could not possibly, have rights to all of Linux. (DJ Br.
¶¶ 131-137, 140, 159; Opp'n at Appendix A, ¶¶
131-136, 140, 159.)64
- SCO has attempted to leverage the Copyrights through an
expansive application of its UNIX licensing agreements (which
relate to UNIX System V only) to exercise control over copyrighted
works owned by IBM (i.e., AIX and Dynix/ptx ("Dynix")). (DJ Br. at
97-98.)
- SCO has asserted the copyrights as to material that is
indisputably unprotectable by copyright, including
SECTION REDACTED
-95.)
- SCO has also sought to enforce the copyrights where enforcement
is not legally permissible, such as because IBM has a license to
the allegedly infringed code (DJ Br. ¶¶ 93-94, 198-215)
or it is in Linux because of SCO's Linux activities. (See,
e.g., DJ Br. ¶¶ 64-71.)
Any one of these grounds is a basis for a determination of misuse.
SCO does not dispute that a copyright holder may not enforce a
copyright that it has misused; nor does it dispute that a copyright
holder misuses a copyright where it seeks to extend the scope of
its limited monopoly to gain control over material outside the
monopoly, or otherwise attempts to use its copyright in a manner
adverse to the public policy. (DJ Br. at 95-100; see Opp'n
at 86-88.)
73
Rather than specifically controvert the proffered evidence of
its misuse of copyright, which is more than adequate to entitle IBM
to the entry of summary judgment, SCO argues that "IBM ignores
SCO's collective work theory". (Opp'n at 87.) According to SCO,
"[t]o the extent [it] is seeking copyright protection for literal
and non-literal components of SVr4 that were created entirely by
others, it only does so to the extent that those components are
derived from System V code or were selected arranged and
coordinated in SVr4". (Id.) Contrary to this contention, SCO
has in fact claimed copyright protection for alleged components of
SVr4 that were created entirely by others, such as BSD. (Items
217-18, 223, 229-30.) In any event, even the broadest collective
work theory could not immunize SCO's over-reaching. Much of SCO's
misconduct has nothing whatever to do with a collective work
theory, which is nowhere mentioned in SCO's Final Disclosures.
SCO also argues that "to the extent IBM's misuse theory hinges
on SCO's out-of-court characterizations of its case, such
statements are irrelevant to this issue. The misuse doctrine does
not extend to good faith allegations of infringement, let alone to
out-of-court characterizations regarding the basis for the
infringement claim". (Opp'n at 87.) SCO's misuse is not limited to
what it calls "out-of-court characterizations of its case". Rather,
as illustrated above, it concerns a pattern of leveraging what are
at most limited rights to UNIX to assert unfounded control over
IBM's and others' property and to force IBM and others to pay
illegitimate and undue licensing fees. Moreover, the record does
not support the assertion that SCO acted in good faith in engaging
in the challenged conduct. On the contrary, the record compels the
conclusion that SCO acted in bad faith. (See IBM's Opp'n to SCO's
Mot. for Summ. J. on IBM's Sec., Third, Fourth and Fifth
Counterclaims.)
74
Lastly, SCO argues that its "comparison of UNIX to the whole of
Linux, AIX, and Dynix/ptx is appropriate". (Opp'n at 87.) It might
be appropriate, for some purposes, to compare UNIX to the whole of
Linux, AIX and Dynix/ptx. But that is irrelevant to whether SCO has
misused its alleged copyrights by attempting to control material to
which it has no rights. SCO's opposition brief offers nothing to
the contrary.
Copyright misuse has been held to bar a claim for copyright
infringement under no more compelling circumstances. See,
e.g., Alcatel v. DGI Tech., Inc., 166 F.3d 772, 793-94 (5th
Cir. 1999) (finding misuse where a copyright holder attempted to
prevent copying of the allegedly infringed operating system for
purposes of inhibiting the development of compatible products, and
thereby gain commercial control over the market for compatible
products, in which the plaintiff has no copyright); Tamburo v.
Calvin, No. 94-5206, 1995 WL 121539, at *7 (N.D. Ill. Mar. 17,
1995) (finding misuse where a copyright holder used its licensing
agreement to extend the holder's monopoly beyond the limited scope
afforded by copyright law) (DJ Br. Ex. L); Lasercomb America,
Inc. v. Reynolds, 911 F.2d 970, 978 (4th Cir. 1990) (finding
copyright misuse where the plaintiff attempted to extend its
copyright control to uncopyrighted material through the use of
expansive licensing agreements); Practice Mgmt. Info. Corp. v.
Am. Med. Assoc., 121 F.3d 516, 520-21 (9th Cir. 1997)
(upholding a misuse defense where the terms of the licensing
agreement were deemed anticompetitive and the copyright holders
used its copyright "in a manner violative of the public policy
embodied in the grant of copyright"). We respectfully submit that
SCO not be allowed to enforce its alleged copyrights based on
misuse.
75
Conclusion
For the foregoing reasons, summary judgment should be entered in
favor of IBM and against SCO on IBM's claim for declaratory
judgment of non-infringement with respect to IBM's Linux
activities.
DATED this 12th day of January, 2007.
SNELL & WILMER L.L.P.
(signature)
Alan L. Sullivan
Todd M. Shaughnessy
Amy F. Sorenson
CRAVATH, SWAINE & MOORE LLP
Evan R. Chesler
David R. Marriott
Of Counsel:
INTERNATIONAL BUSINESS MACHINES CORPORATION
Alec S. Berman
[address]
[phone]
Attorneys for Defendant/Counterclaim-Plaintiff
International Business Machines Corporation
76
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]
(signature)
77
CERTIFICATE OF SERVICE
I hereby certify that on the 16th 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
78
INDEX TO ADDENDA
Addendum A: |
IBM's Undisputed Facts: IBM DJ Brief |
Addendum B: |
IBM's Objections to SCO's Alleged Evidence |
Addendum C: |
The 326 Lines of Linux Code |
Addendum D: |
Applicability of Defenses to the Linux Code |
Addendum E: |
Ontario Die Co. of America v. Indep. Die Assoc.,
Inc.,
No. 89-30035, 1990 WL 300899 (RD. Mich. Aug. 24, 1990) |
Addendum F: |
Glenayre Elec., Inc. v. Jackson,
No. 02-0256, 2003 WL 366574 (N.D. Ill. Feb. 19,2003) |
Addendum G: |
Brown v. Latin American Music Co., Inc.,
No. 05-1242, 2006 WL 2059606 (D.P.R. July 21,2006) |
Addendum H: |
Shea v. Fantasy Inc.,
No. 02-02644, 2003 WL 881006 (N.D. Cal. Feb. 27, 2003) |
Addendum I: |
Tuff 'N' Rumble Mgmt., Inc. v. Profile Records,
Inc.,
No. 95-0246, 1997 WL 158364 (S.D.N.Y. Apr. 2,1997) |
Addendum J: |
Pannonia Farms, Inc. v. USA Cable,
No. 03-7841, 2004 WL 1276842 (S.D.N.Y. June 8,2004) |
Addendum K: |
Positive Black Talk, Inc. v. Cash Money Records,
Inc.,
No. 02-0425, 2003 WL 1522941 (E.D. La. Mar. 20, 2003) |
Addendum L: |
Sunham Home Fashions, LLC v. Pern-American, Inc.,
No. 02-6284, 2002 WL 31834477 (S.D.N.Y. Dec. 17, 2002) |
Addendum M: |
Hart v. Sampley,
No. 91-3068, 1992 WL 336496 (D.D.C. June 24, 1991) |
Addendum N: |
Flinders v. Workforce Stabilization Plan of Phillips
Petroleum Co.,
No. 04-541, 2006 WL 641524 (D. Utah Mar. 10, 2006) |
Addendum O: |
The SCO Group, Inc. v. Novell, Inc.,
No. 04-00139, 2004 WL 4737297 (D. Utah June 9, 2004) |
79
Addendum P: |
3M Innovative Prop. Co. v. Barton Nelson, Inc.,
No. 02-3591,2003 WL 22989077 (D. Minn. Dec. 12,2003) |
Addendum Q: |
Medtronic, Inc. v. Guidant Corp.,
No. 00-1473, 2003 WL 21181103 (D.Minn. May 16,2003) |
Addendum R: |
Armento v. City of Ashville Downtown Dev. Office,
No. 94-57, 1996 WL 677119 (W.D.N.C. Mar. 26, 1996) |
Addendum S: |
In re Papst Licensing, GmbH Patent Litig.,
Nos. MDL 1298, 99-3118, 2000 WL 1859013 (E.D. La. Dec. 19,
2000) |
Addendum T: |
Forest Labs., Inc. v. Abbott Labs.,
No. 96-159, 1999 WL 33299123 (W.D.N. Y.June 23, 1999) |
Addendum U: |
Moore v. Pyrotech Corp.,
No. 92-3404,13 F.3d 406 (Table), 1993 WL 513834 (10th Cir.
1993) |
Addendum V: |
Konstant Prods. Inc. v. Frazier Indus. Co., Inc.,
No. 91-4491,1993 U.S. Dist. LEXIS 7957 (N.D. 111. June 7,
1993) |
Addendum W: |
Energetec Sys., Inc. v. Kayser,
No. 84-10611, 1986 WL 8058 (N.D. HI. July 17, 1986) |
Addendum X: |
Utah Lighthouse Ministry, Inc. v. Discovery Computing,
Inc.,
No. 05-380,2005 WL 3263157 (D. Utah Dec. 1, 2005) |
Addendum Y: |
Vanover v. Altec Indus., Inc.,
82 Fed. Appx. 8 (10th Cir. 2003) |
Addendum Z: |
Stover v. Eagle Prods., Inc.,
No. 93-4047, 1996 WL 172972 (D. Kan. Mar. 19, 1996) |
Addendum AA: |
Carlson v. C.H. Robinson Worldwide, Inc.,
Nos. 02-3780 & 02-4261, 2005 WL 758601 (D. Minn. Mar. 30,
2005) |
Addendum BB: |
Hutton Contracting Co., Inc. v. City of Coffeyville,
No. 02-4130,2004 WL 2203449 (D. Kan. Sept. 24, 2004) |
80
1. |
Terms are defined and used herein as they were in IBM's opening
brief. In addition, references herein are as follows: cites to "DJ
Br. ¶ __ " refer to IBM's "Statement of Undisputed Facts" in
IBM's opening brief, and 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. References to SCO's
opposition papers are given as "Opp'n at __", and references to the
declarations and documents appended to the Declaration of Brent O.
Hatch are cited herein as "SCO Ex. __".
(Referenced here)
|
2. |
See also Lefler v. United Healthcare of Utah,
Inc., 162 F. Supp. 2d 1310, 1315 (D. Utah 2001) ("In a case
where a party moves for summary judgment on an issue on which he
would not bear the burden of persuasion at trial, his initial
burden of production may be satisfied by showing the court there is
an absence of evidence in the record to support the nonmovant's
case... Once the moving party has met this initial burden of
production, the burden shifts to the nonmoving party to designate
'specific facts showing that there is a genuine issue for trial'.")
(quoting Fed. R. Civ. P. 56(e)).
(Referenced here)
|
3. |
See, e.g., 12 Moore's Federal Practice § 57.62[2][d]
(3d ed. 1997) ("In patent, copyright, and trademark cases, courts
have generally recognized that any role reversal occasioned by
declaratory relief should not shift the burden of proof from the
manner in which it would be assigned in a coercive infringement
suit. In general, the holder bears the burden of proving the
validity of the patent, copyright, or trademark and that some
specific activity or product is infringing or would infringe. If
the burden of proof is shifted in these declaratory relief actions,
the alleged infringer would be forced to prove a negative, that no
conceivable activity could infringe on any of the holder's rights.
Rather, when declaratory relief actions are prompted by a specific
threat made by the holder, the holder is simply put to its proof.")
(internal citation omitted).
(Referenced here)
|
4. |
The only other case cited by SCO is also unavailing. In Wuv's
International, Inc. v. Love's Enterprises, Inc., the plaintiff,
Wuv's International, sought an affirmative declaration that "it had
the right to the use and registration of the mark 'WUVS'", not a
declaration of noninfringement. 208 U.S.P.Q. 736, 757 (D. Colo.
1980). The court in that case ruled that a declaratory judgment
plaintiff carried the burden of establishing that its own
service mark was protectable and could be registered with the U.S.
Patent and Trademark Office, but the defendant carried the burden
of establishing that plaintiff infringed its "Love's" service mark.
Id. at 747, 756-757.
(Referenced here)
|
5. |
See also Intellicall, Inc. v. Phonometrics, Inc.,
952 F.2d 1384, 1389 (Fed. Cir. 1992) (affirming grant of summary
judgment on claim for declaration of non-infringement where
defendant produced no evidence of infringement in opposition to
motion); Johnston v. IVAC Corp., 885 F.2d 1574, 1577 (Fed.
Cir. 1989) (same); Ontario Die Co. of America v. Indep. Die
Assoc., Inc., No. 89-30035, 1990 WL 300899, at *2 (E.D. Mich.
Aug. 24, 1990) ("Once a party seeking a declaration of
noninfringement sets forth materials suggesting non-response to a
patentee's claim, the burden shifts to the patentee to provide
materials that at a minimum raise actual doubt concerning potential
infringement.") (Addendum E hereto); Glenayre Elec., Inc. v.
Jackson, No. 02-0256, 2003 WL 366574, at *2 (N.D. Ill. Feb.
19,2003) ("'The motion of an accused infringer for judgment on the
ground of non-infringement of a patent may be granted where the
patentee's proof is deficient in meeting an essential part of the
legal standard for infringement.'") (quoting
Johnston, 885 F.2d at 1577) (Addendum F hereto).
(Referenced here)
|
6. |
In establishing a final deadline for the identification of
allegedly misused material, the Court agreed with IBM that this
case should be litigated based on timely disclosures. (See DJ Br.
¶¶ 160-61.) Notably, SCO stipulated and agreed with IBM
that it was required to identify with specificity any and all
material that it contends IBM misused in the Final Disclosures. (DJ
Br. ¶ 166.)
(Referenced here)
|
8. |
Throughout its opposition brief, SCO asserts that IBM has
conceded various aspects of SCO's case, such as that the new
material identified by SCO in its opposition papers is infringing.
(E.g.. Opp'n at 57 n.6.) We do not dwell on these assertions here
except to note that they are pure fiction.
(Referenced here)
|
9. |
Law of the case aside, the rules and case law are clear that a
party cannot survive summary judgment if it fails to produce,
during discovery, evidence supporting a necessary element of its
opposition. See, e.g., Lawrence v. IBP. Inc., No.
94-2027, 1995 WL 261144, at *7 (D. Kan. Apr. 21, 1995) (DJ Br. Ex.
D); Stone v. CGS Distrib. Inc., No. 93-1288,1994 WL 832021,
at *6 (D. Colo. Aug. 18, 1994) (DJ Br. Ex. E); see also
Lauth v. McCollum, No. 03-8529, 2004 WL 2211620, at *4 (N.
D. Ill. Sept. 30, 2004) (DJ Br. Ex. F); Cambridge Elec. Corp. v.
MGA Elec., Inc., 227 F.R.D. 313, 325 (C.D. Cal. 2004).
(Referenced here)
|
10. |
SCO argues that it owns the UNIX copyrights because it acquired
the copyrights from Santa Cruz after it acquired them from Novell.
(Opp'n at 49-50; Opp'n ¶ 68.) For the sake of efficiency, we
deal with those arguments in IBM's reply memorandum in further
support of its motion for summary judgment on SCO's copyright
claim, which is incorporated herein by reference. Suffice it to say
here that SCO cannot show that Novell transferred the copyrights to
Santa Cruz.
(Referenced here)
|
11. |
SCO also argues that "IBM has not challenged the validity of
SCO's registrations". (Opp'n at 49.) That is incorrect. In its
opening papers, IBM argued that "SCO has failed to adduce adequate
evidence of ownership". (DJ Br. at 76-77.)
(Referenced here)
|
12. |
SCO argues that "federal courts regularly afford a presumption
of validity to copyrighted works that have been registered more
than five years after publication". (Opp'n at 50 (incorporating by
reference SCO's Response to IBM's Motion for Summary Judgment on
Copyright Infringement at 58).) SCO is wrong. The two cases cited
by SCO, Ushodaya Enters., Ltd. v. V.R.S. Int'l., Inc. and
Religious Tech. Ctr. v. Netcom On-Line Communication Servs.,
Inc., both stand for the unremarkable proposition that a court
may entitle weight to untimely registrations; they do not stand for
the proposition that a court can presume their validity; nor do
they hold that untimely registrations can shift the burden to the
defendant to disprove ownership. Ushodaya Enters., Ltd. v.
V.R.S. Int'l, Inc., 63 F. Supp. 2d 329, 340 (S.D.N.Y. 1999);
Religious Tech. Ctr. v. Netcom On-Line Communication Servs.,
Inc., 923 F. Supp. 1231, 1242 (N.D. Cal. 1995).
(Referenced here)
|
13. |
See Jacobsen v. Deseret Book Co., 287 F.3d 936,
942 (10th Cir. 2002); Gates Rubber Co. v. Bando Chem. Indus.,
Ltd., 9 F.3d 823, 831 (10th Cir. 1993).
(Referenced here)
|
14. |
As is apparent on the face of the registrations,
SECTION REDACTED
(Referenced here)
|
15. |
The cases on which SCO relies do not support the contention that
IBM lacks standing to challenge SCO's purported ownership.
Lyrick Studios, Inc. v. Big Idea Productions, Inc., 420 F.3d
388, 394 (5th Cir. 2005), is inapposite because there the party
challenging the transfer was the party who entered into the
agreement —”not a third party. Moreover, not only did
the defendant there have standing to challenge ownership, it
defeated the plaintiff's claim based on it. 420 F.3d at 395-96.
Both Sunham Home Fashions, LLC v. Pern-American, Inc., No.
02-6284, 2002 WL 31834477 at * 7 (S.D.N.Y. Dec. 17, 2002) (Addendum
L hereto), and Hart v. Sampley. No. 91-3068, 1992 WL 336496,
at * 1 (D.D.C. June 24, 1991) (Addendum M hereto), merely held that
a third party cannot challenge a transfer where the plaintiff has
provided a valid registration, the defendant's challenge is based
on the particularity requirements of the Copyright Act and there
are no "disputes between copyright owners and transferees about the
status of the copyright." Sunham, at *7; Hart, at *1.
Here, not only does SCO not have timely registrations (and in the
case of
SECTION REDACTED
, no registration at all), but there is a pending litigation
between Novell and SCO over the status of the copyrights in this
case, and IBM challenges SCO's failure to show any proof of
ownership.
(Referenced here)
|
16. |
As explained in IBM's opening brief, in May 2002, SCO joined
with other Linux vendors, including Conectiva, Inc., SuSE Linux AG
and Turbolinux, to form a company called UnitedLinux, LLC
("UnitedLinux"), to develop a single uniform distribution of Linux
appropriate for business use. The agreements defining the
respective rights and liabilities of each of the UnitedLinux
members in relation to this development project were entitled the
Joint Development Contract (the "JDC") and the Master Transaction
Agreement ("MTA"). (DJ Br. ¶¶ 111-14.)
(No reference in document, apparently redacted)
|
18. |
SCO looks for support in certain parol evidence (Opp'n at 51;
Opp'n ¶ 77), but it is no impediment to summary judgment
because where, as here, the plain language of an agreement is
unambiguous, resort to parol evidence is inappropriate. See
Bakowski v. Mountain States Steel, Inc., 52 P.3d 1179, 1184
(Utah 2002); Utah Transit Auth. v. Salt Lake City Southern R.R.
Co., Inc., 131 P.3d 288, 291 (Utah App. 2006). Moreover, even if
such evidence were appropriate, the parol evidence submitted by SCO
(SCO Ex. 233 ¶ 14) is classic hearsay and/or without
foundation and thus could not defeat summary judgment. SCO relies
on a SCO employee purportedly testifying as to what the UnitedLinux
"Members understood" and what a SuSE employee said to him.
See Wells v. Boston Ave. Realty, 125 F.3d 1335, 1340
(10th Cir. 1997); Flinders v. Workforce Stabilization Plan of
Phillips Petroleum Co., No. 04-541, 2006 WL 641524, at *11 (D.
Utah Mar. 10, 2006) (Kimball, D.J.) (Addendum N hereto).
(No reference in document, apparently redacted)
|
19. |
For example, as stated, on November 19, 2002, SCO announced its
release of SCO Linux 4.0, "based on UnitedLinux 1.0, the core
standards-based Linux operating system co-developed in an industry
initiative to streamline Linux development and certification around
a global, uniform distribution of Linux." (IBM Ex. 622 at
SCO1242623.)
(No reference in document, apparently redacted)
|
20. |
(No footnote, appears to be redacted)
(Referenced here)
|
21. |
In its counterstatement of facts, SCO makes much of two lines of
Linux code from the file
SECTION REDACTED
Thus, the Mazieres declaration states that
SECTION REDACTED
(IBM Ex. 226 f 10.) In any event, SCO does not dispute
SECTION REDACTED
(No reference in document, apparently redacted)
|
22. |
(No footnote, appears to be redacted)
(Referenced here)
|
23. |
See also Medtronic. Inc. v. Guidant Corp., No.
00-1473, 2003 WL 21181103, at *5 (D. Minn. May 16, 2003) (same)
(Addendum Q hereto); I.A.E., Inc. v. Shaver, 74 F.3d 768,
778 (7th Cir. 1996) (holding that the existence of a license to use
an allegedly infringed work is a defense to a claim of copyright
infringement); RT Computer Graphics, Inc. v. United States,
44 Fed. Cl. 747, 754-55, 760 (Fed. Cl. 1999) (same).
(Referenced here)
|
25. |
See Taylor Engines v. All Steel Engines, 192 F.2d
171, 174 (9th Cir. 1951) (applying to patent law "the broad
equitable principle that where one purports, for value, to convey
title to personal property which he does not own, as between the
grantor subsequently acquiring title and the grantee, the latter
should have the property."); Respect, Inc. v. Comm. on the
Status of Women, 815 F. Supp. 1112, 1116 n.5 (N.D. Ill. 1993)
(noting that "a defense based on the application against [the
plaintiff] of a doctrine similar to the property concept of
estoppel by deed" might have been argued for against a claim for
copyright infringement); see also Arnold Indus. v.
Love, 63 P.3d 721, 726 (Utah 2002) (holding that the common law
rule of after-acquired title survives and is broader than the real
property statute enshrining this principle, U.C.A. 1953 §
57-1-10).
(Referenced here)
|
26. |
In a footnote, SCO suggests that the SOW somehow takes away the
license otherwise granted by the SBA. (Opp'n at 67-68 n.10.) SCO
offers no explanation or support for its view, and there is
none.
(No reference in document, apparently redacted)
|
27. |
Moreover, the "conduit" language cited by SCO relates only to
the "licenses under which the Licensed Works are distributed",
i.e., the GPL. (See Opp'n at 33, 67; IBM Ex. 467 at
1710023510.) SCO's citation to the terms under which Caldera
distributed its Linux products to end-users has no bearing
on the broad terms under which Caldera licensed its Linux products
to IBM.
(Referenced here)
|
28. |
SCO claims that IBM was reluctant to take responsibility for the
Linux Code and suggests that this was the case because IBM knew the
Linux Code was encumbered. (Opp'n at 68.) SCO offers no evidentiary
support for this assertion, and there is none.
(No reference in document, apparently redacted)
|
29. |
SCO's argument regarding the language of the "remainder of Spec
1170" does not in fact refer to Spec 1170. (Opp'n at 70.)
(Referenced here)
|
30. |
The unrebutted testimony of Novell confirms the existence and
scope of this license. "[I]n 1994, USL/Novell and others entered
into a Cross-License Agreement concerning common API specifications
with respect to SPEC 1170, wherein USL/Novell granted IBM (among
others) a license to the API specification" (IBM Ex. 238 ¶
12), further explaining, "Novell believed ... that efforts to
standardize Unix across platforms — whether derived from
AT&T UNIX code or not — would ultimately be in Novell's
best interests". (IBM Ex. 238 ¶ 13.)
(Referenced here)
|
31. |
SECTION REDACTED
(Referenced here)
|
32. |
Incredibly, SCO argues that only non-UNIX systems, such as
Windows, were allowed to use
SECTION REDACTED
despite that fact that the TIS Specifications do essentially the
opposite — they establish
SECTION REDACTED
as the format for all operating systems except Windows.
(Opp'n at 72-73; IBM Ex. 438 at i; IBM Ex. 439 at iii.)
(Referenced here)
|
33. |
Even if SCO were correct that the Novell-TIS letter limits each
operating system to only one source of
SECTION REDACTED
, Linux would still have access to the disputed
SECTION REDACTED
from either the SVABI or the TIS Specification.
Thus, SCO's argument is merely academic.
(Referenced here)
|
34. |
SCO has repeatedly identified Windows as an operating system
that competes with its UNIX-based products. (IBM Ex. 114 at 30; IBM
Ex. 111 at 12; IBM Ex. 113 at 6.)
(Referenced here)
|
35. |
Novell has acknowledged as much;
SECTION REDACTED
(Referenced here)
|
36. |
SCO also argues that the copyright notice requirement "suggests
that AT&T did not release its copyright in the code contained
in the TIS Specifications to the committee". (Opp'n at 73.) Whether
AT&T released its copyrights to the TIS committee is
irrelevant to whether Novell later granted the TIS Committee a
license to this code.
(No reference in document, apparently redacted)
|
38. |
The same undisputed facts supporting a finding of estoppel
support a finding that SCO abandoned and waived the right to pursue
its allegations of infringement. With respect to these issues,
SCO's opposition merely falls back on its response to IBM's
estoppel arguments and is unavailing for the same reasons its
response to IBM's estoppel arguments are unavailing. (Opp'n at 86.)
With respect to abandonment, SCO adds that "an overt act" is
required to support a finding of abandonment. (Id.) But even
if that is true, SCO engaged in numerous overt acts of abandonment,
as set forth in IBM's opening brief. (DJ Br. at 87.)
(Referenced here)
|
39. |
SCO cites several cases for the proposition that estoppel is not
appropriate for summary judgment. (Opp'n at 74-75 & n.12.)
However, those cases merely denied or reversed summary judgment on
the facts presented in those cases. None of them holds that
estoppel can never be entered on summary judgment.
(Referenced here)
|
40. |
The cases cited by SCO in this connection are inapposite.
Pyrodyne Corp. v. Pyrotronics Corp., 847 F.2d 1398, 1402
(9th Cir. 1988), addressed the question of whether equitable
defenses are available as defenses to incontestable trademarks, not
whether equitable defenses are limited to only the defendant in
suit. Newman v. Checkrite California, Inc., 912 F. Supp.
1354, 1376 (E.D. Cal. 1995) and Eastman Kodak Co. v. Rakow,
739 F. Supp. 116, 120 n.2 (W.D.N.Y. 1989), merely stand for the
general proposition that equitable defenses are personal; they do
not stand for the proposition that such defenses can never be
litigated on behalf of third parties. See In re Papst
Licensing, 2000 WL 1859013, at *1.
(Referenced here)
|
41. |
See, e.g., In re Papst Licensing, 2000 WL 1859013,
at *2 (denying defendant Papst's motion to dismiss plaintiff
Minebea's declaratory judgment claim that Pabst "should be
equitably estopped from asserting its patents against Minebea's
customers because of representations made by Papst to Minebea", and
rejecting defendant's argument that "Minebea cannot sue on behalf
of any customers whom it has not agreed to indemnify").
(Referenced here)
|
42. |
SCO also complains that IBM failed to plead estoppel as a
defense. (Opp'n at 75.) That is incorrect, as IBM's pleadings make
clear. See IBM's 03/26/2004 Ans. to SCO's Sec. Am. Compl. at
23, Seventh Aff. Def. (IBM Ex. 627); IBM's 03/29/2004 Sec. Am.
Counterclaims, at 39-40, Tenth Counterclaim (IBM Ex. 3).
(Referenced here)
|
43. |
See, e.g., Moore v. Pyrotech Corp., 13 F.3d 406,
1993 WL 513834, at *5-6 (10th Cir. 1993) (holding that a corporate
successor was liable for the debts of its predecessor "where the
purchasing corporation [wa]s merely a continuation of the selling
corporation") (Addendum U hereto); Glass v. Pfeffer, 849
F.2d 1261, 1267 (10th Cir. 1988) (holding that district court
properly awarded attorneys' fees against corporate successor for
conduct of its predecessor); Remington Rand v. Acme Card Sys.
Co., 29 F. Supp. 192, 195 (D. Ohio 1937) (holding that
plaintiff was charged with the dilatory conduct of its corporate
predecessor for applying laches); Macris & Assocs., Inc. v.
Neways, Inc., 986 P.2d 748, 752 (Utah 1999) (stating that
"where one company sells or otherwise transfers all its assets to
another company the latter" may be liable "for the debts and
liabilities of the transferor" where "the purchasing corporation is
merely a continuation of the selling corporation").
(Referenced here)
|
44. |
See also Ory v. McDonald, 68 U.S.P.Q. 2d 1812,
1817 (C.D. Cal. 2003) (stating that "a successor-in-interest is
charged with the knowledge and dilatory conduct of its
predecessors" (internal quotation omitted)); Konstant Prods.
Inc. v. Frazier Indus. Co., Inc., No. 91-4491, 1993 U.S. Dist.
LEXIS 7957, at *47 (N.D. Ill. June 1, 1993) (ruling that defendant
was "charged with the knowledge of [its predecessor-in-interest]
and the consequences of his dilatory conduct") (Addendum V hereto);
MGA, Inc. v. Centri-Spray Corp., 639 F. Supp. 1238, 1242
(E.D. Mich. 1986) (finding that successor-in-interest is charged
with "consequences of [predecessor-in-interest's] knowledge and
dilatory conduct").
(Referenced here)
|
45. |
See Wang Labs., Inc. v. Mitsubishi Elec. Am..
Inc., 103 F.3d 1571, 1575, 1581-82 (Fed. Cir. 1997) (affirming
equitable estoppel barring infringement suit based on plaintiff's
conduct "over a six-year period" that included a time when
plaintiff did not hold the patent-in-suit); Rambus, Inc. v.
Infineon Tech. AG., 326 F. Supp. 2d 721,738 (E.D. Va. 2004)
(holding that the "mere fact that, at the time of the misleading
communication (whether by conduct or inaction), a patent has not
been issued should not permit the actor, upon the defendant's proof
of the other elements of equitable estoppel, to escape the
consequences of its misleading communications after the patent has
in fact been issued.").
(Referenced here)
|
46. |
SECTION REDACTED
(Referenced here)
|
47. |
Contrary to SCO's suggestion, the SCO conduct giving rise to a
basis for estoppel did not end with the filing of the complaint.
(Opp'n at 83-84.) For years after the filing of this suit, SCO hid
the ball about its specific allegations of infringement, while at
the same time continuing to distribute Linux and otherwise make it
available to its customers and others. (DJ Br. ¶¶ 140-
45.)
(Referenced here)
|
48. |
Underlying SCO*s argument is the premise — unsupported by
any evidence — that IBM single-handedly turned Linux into an
enterprise-hardened platform without SCO's knowledge (even though
all of IBM's Linux contributions were public). To the extent Linux
evolved over time into an enterprise-hardened platform (whatever
exactly SCO means by that), it is due to the efforts of an entire
community, including SCO itself. Although SCO pretends to have had
no role in the evolution of Linux into an enterprise-hardened
platform, it actually played a key role, as evidenced by the public
statements of its former CEO (Ransom Love). In 2000, Mr. Love
stated: "Caldera's committed to Linux standard base. You're going
to see significantly more investment o[f] our time and effort to
bring that about with the [Santa Cruz] acquisition... Our goal is
to promote, encourage and establish open standards that will
maximize application, development and business use. In that way
Linux will cross the chasm." (IBM Ex. 470 at 13-14.)
(Referenced here)
|
49. |
See also McCullough Tool Co. v. Well Surveys,
Inc., 395 F.2d 230, 238 (10th Cir. 1968) (holding that "not
every misconduct [] will cause a court to apply the doctrine of
unclean hands. Rather... [unclean hands] is confined to misconduct
in relation to or in all events connected with the matter in
litigation so that it in some manner affects the equitable
relations of the parties to the suit"); Hoehn v. Crews, 144
F.2d 665, 672 (10th Cir. 1944) (holding that the doctrine of
unclean hands "is confined to misconduct in relation to the matter
in litigation, so that in some manner it affects the equitable
relation of the parties to the suit"); Utah Lighthouse Ministry,
Inc. v. Discovery Computing, Inc., No. 05-380, 2005 WL 3263157,
at *9 (D. Utah Dec. 1, 2005) (Kimball, D. J.) (holding that the
"unclean hands doctrine requires that the inequitable conduct on
the part of the plaintiff be related to the plaintiff's cause of
action") (Addendum X hereto).
(Referenced here)
|
50. |
See also Nat'l Cable Television Assoc. v. Broad.
Music, Inc., 772 F. Supp. 614, 653 (D.D.C. 1991) (holding that
the doctrine of "unclean hands [] require[d]
[counterclaim-plaintiffs] to show at least the responsibility of
[counterclaim-defendants] for their infringements"); Mirmingos
v. Benjamin, 288 B.R. 521, 523 (Bankr. N.D. Ill. 2003) (denying
unclean hands where party asserting doctrine failed to show that
his actionable conduct "was in any way caused by or related to Mr.
Benjamin's alleged misconduct or any other misrepresentations by
Mr. Benjamin").
(Referenced here)
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51. |
See Carson v. Dynegy, Inc., 344 F.3d 446, 455 n.9 (5th
Cir. 2003) (affirming finding of estoppel despite argument that
defense was not available "because [defendant] Dynegy continued to
use [the infringing work] and, arguably, introduced a derivative
work after this lawsuit was filed"); Quinn v. City of
Detroit, 23 F. Supp. 2d 741, 753 (E.D. Mich. 1998) (finding
estoppel despite the fact that defendant committed infringing acts
after receiving a termination notice because "long before the
November 20, 1995 [termination] letter, Quinn was estopped from
withdrawing his consent because of the [defendants'] reliance");
Keane, 968 F. Supp at 948 (stating that "a general rule ...
that detrimental reliance ends when a lawsuit is filed would
obviate estoppel as an equitable defense" and finding estoppel
despite defendant's continued actions after filing of lawsuit).
(Referenced here)
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52. |
SCO misplaces reliance on Peer International Corp. v. Luna
Records, Inc., 887 F. Supp. 560, 567 (S.D.N.Y. 1995),
Steinberg v. Columbia Pictures Industries, Inc., 663 F.
Supp. 706 (S.D.N.Y. 1987), and Kraft v. Cohen, 32 F. Supp.
821, 825 (E.D. Pa. 1940), rev'd 117 F.2d 579 (3d Cir. 1941).
None of these cases stands for the proposition that a defendant's
detrimental reliance, once established, can be negated or
undermined by its continued actions after it has been given notice
that plaintiff intends to assert its rights. In these cases, the
defendants failed to show that the plaintiff engaged in any
misleading conduct, so that defendants there could not demonstrate
any detrimental reliance. None of the cases dealt with a situation
such as here, where a defendant has relied to its detriment and
then continued its actions despite warning by the plaintiff. In
such a situation, courts have held that a defendant's continued
actions will not necessarily negate or undermine defendant's
detrimental reliance, nor preclude estoppel. See
Carson, 344 F.3d at 455 n.9 (affirming finding of estoppel
despite the fact that "Dynegy continued to use [the infringing
work] and, arguably, introduced a derivative work after this
lawsuit was filed"); Quinn, 23 F. Supp. 2d at 753 (finding
estoppel despite the fact that defendant committed infringing acts
after receiving a termination notice); Keane, 968 F. Supp at
948 (finding estoppel despite defendant's continued actions after
filing of lawsuit).
(Referenced here)
|
53. |
In a footnote, SCO argues that even if IBM did not have actual
knowledge, its reliance was not reasonable "where IBM had ample
reason and opportunity to inquire as to SCO's rights in UNIX and
Linux", (Opp'n at 84 n.l5.) Based on the pattern of support
demonstrated by SCO over the course of nearly a decade, IBM had no
reason to question the accuracy of SCO's public statements,
including those made to regulators. (See, e.g., Caldera
Systems 2000 10-K: "Caldera enables the development, deployment and
management of Linux ... Our Linux software products and service
offerings are specifically designed to meet the complex needs of
eBusiness ... We facilitate the adoption of Linux by providing
educational programs designed to help our customers to develop,
deploy and administer Linux systems. We embrace the open source
model and participate as a key member of many open source industry
standards and partner initiatives, including Linux Professional
Institute, Linux Standards Base and Linux International Group."
(IBM Ex. 107 at 4); see also, IBM Ex. 105 at 4-5; IBM Ex.
106 at 5.) Moreover, as stated, SCO expressly represented to
IBM":
SECTION REDACTED
(Referenced here)
|
54. |
To support its contention that Linux is substantially similar to
UNIX SVr4, SCO also argues: (1) "IBM has never addressed, either in
its motion or its expert reports, SCO's legal theory that
SECTION REDACTED
stated, the Court has already ruled that SCO may not proceed as to
this material. (IBM. Ex. 59 at 2; IBM Ex. 621; IBM Ex, 630.)
(Referenced here)
|
55. |
In its Final Disclosures, SCO identified
SECTION REDACTED
are included with this submission as Addendum D.
(No reference in document, apparently redacted)
|
56. |
SCO's only other cited support is its statement that
SECTION REDACTED
(No reference in document, apparently redacted)
|
57. |
In its opening brief (DJ Br. at 91), IBM cited Lawrence v.
IBP, Inc. and Stone v. CGS Distribution Inc. as
authority for the proposition that in light of SCO's failure to
provide discovery on this issue, SCO cannot support the contention
that the System V Code represents more than mere ideas and
processes. Lawrence v. IBP, Inc., No. 94-2027, 1995 WL
261144, at *7 (D. Kan. Apr. 21, 1995) (DJ Br. Ex.; Stone v. CGS
Distrib. Inc., No. 93-1288, 1994 WL 832021, at *6 (D. Colo.
Aug. 18, 1994).
(Referenced here)
|
58. |
Here, too, SCO argues that there is a genuine issue of material
fact because "IBM does not address the disputed material at a
non-literal level". (Opp'n at 62.) As stated above, the Court has
made clear that SCO may not proceed as to this material, which was
not specifically identified in SCO's Final Disclosures.
(Referenced here)
|
59. |
Here and elsewhere, SCO suggests that IBM's position is
inconsistent with the position it took as an amicus curiae in the
Gates Rubber case. (Opp'n at 62-63.) Although the position
taken in the joint amicus brief of IBM and nine other amici
requested that "the [Tenth Circuit] affirm the conclusions of law
relating to substantial similarity made by the court below" (SCO
Ex. 98 at 19), the Tenth Circuit did not adopt the amici's
position, vacating and remanding the district court's opinion on
the issue of copyright infringement because "the district court
failed adequately to filter" unprotectable elements in its
substantial similarity analysis (Gates Rubber, 9 F.3d at
849). SCO's assertion that IBM is somehow bound by its past
position against the law that indisputably governs this case is
simply wrong and unsupported by any legal authority.
(Referenced here)
|
60. |
SECTION REDACTED
See Mitel Inc. v. Iqtel, Inc., 124 F.3d 1366, 1374
(10th Cir. 1997) (sequence of numbers held to be unoriginal).
(Referenced here)
|
61. |
Country Kids cites extensively to Gates Rubber,
stating explicitly that the substantial similarity analysis
performed in Country Kids, "was developed for use in the
context of alleged infringement of computer software...[,]
[h]owever, we see no reason to limit the
abstraction-filtration-comparison approach to cases involving
computer programs." Country Kids 'N City Slicks v. Sheen, 77
F.3d 1280, 1284 n.5 (10th Cir. 1996), citing Gates
Rubber, 9 F.3d at 834-39. SCO's argument that Country
Kids' application of the Gates Rubber substantial
similarity analysis had already been rejected by the Tenth Circuit
years beforehand in the Gates Rubber case defies logic.
Similarly, SCO's assertion that the Tenth Circuit's substantial
similarity analysis in Country Kids was rejected ten years
earlier by the Third Circuit in Whelan is plainly incorrect.
See Whelan Assocs., Inc. v. Jaslow Dental Lab., Inc.,
797 F.2d 1222 (3d Cir. 1986).
(Referenced here)
|
62. |
"After the court has filtered out those elements of the
original program that it has found to be unprotectable, it is left
with a core of protected elements that can be compared to the
alleged infringing program." Gates Rubber, 9 F.3d at 838-39
(emphasis added).
(Referenced here)
|
63. |
In its counterstatement of facts, SCO merely asserts irrelevant
facts relating to the treatment of USL-derived material under the
USL-BSD Settlement Agreement. (Opp'n at Appendix A ¶ 288.) SCO
offers no admissible evidence concerning the BSD-derived material
at issue here. (Id.)
(No reference in document, apparently redacted)
|
64. |
SCO purports to dispute only one of these IBM fact paragraphs
(¶ 137), but fails to meet the requirements of DUCivR 56-l(c)
because it offers only one word, "Disputed", in opposition. (Opp'n
at Appendix A ¶ 137; DUCivR 56-l(c).) The facts showing that
SCO publicly asserted claims to all of Linux while failing to
substantiate its claims are undisputed and indisputable.
(Referenced here)
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