Shoot the breeze, anything goes.
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Steven W
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2015-09-04 03:22 »

I'm glad you got a laugh outta that, Non Hic. Personally, the "holy covenants" bit made me chuckle as it came to my mind. This whole document reeks of desperation to me. It seems like a throw-everything-at-the-wall-and-pray-very-hard-something-sticks approach. If we come to find out that some of this stuff was redacted or sealed, it will strike me as something far worse. I just can't find the right words. Maybe it seems like the kinda of stuff you attempt to bring up during a jury trial, if you can get away with it, in an attempt to bamboozle stupid members of said jury. Parts of it seem to deny what's happened in the past during this whole saga. God knows, they'd probably really like a chance to get a big do-over.

I'm not certain what to make of IBM's strategy of sitting back and saying nothing. Perhaps the hope is that good Judge Nuffer will get a taste of what dealing with the company formerly known as Caldera is really like.

Anyway, I'm going to pick up where I left off in this huge document starting with my next post, then the letter attached after that. Double ugh!! :lolno:

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Steven W
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2015-09-04 06:08 »

Section 2

DISPUTED FACTS FROM IBM'S MOTION


84. [I.12] SCO alleges that "(b)ecause IBM has been developing its plan to replace UnixWare support with Linux support, and because it knew SCO had dedicated its entire enterprise resources to the IBM/UnixWare joint relationship, IBM had a fiduciary obligation to inform SCO of its Linux-related plans long before its Linux public announcement in December 1999." (Ex. 33 at Interrogatory Response No. 7.) In fact, IBM made a public announcement of its intention to support Linux at LinuxWorld in March 1999. (Ex. 21 at 4; Ex. 259 at 38.)

SCO's Response: IBM's public statements did not reveal IBM's true Linux strategy, which included the abandonment of Project Monterey, the duping of Santa Cruz and Caldera, and the misuse of SCO's SVr4 code. (SCO Statement of Additional Material Facts ("SCO AMF") ¶¶ S.25-S.75.) Moreover, even after the 1999 announcement, IBM deceived Santa Cruz into believing that it would continue to support Project Monterey. (Id.)

IBM's Reply: There is no evidence that IBM abandoned Project Monterey, duped or deceived Santa Cruz or Caldera, or misused Santa Cruz's SVR4 code. In any case, none of these allegations supports a claim by SCO of unfair competition. (IBM's Reply Br. at 15-18.)

85. [I.13] SCO also alleges that IBM engaged in unfair competition by copying into IBM's AIX operating system code from the SVr4 operating system that had been included in Santa Cruz's UnixWare 7 product. (Ex. 33 at Interrogatory Response No. 7.) According to SCO, IBM obtained that code during the course of Monterey and its use of that code exceeded the scope permitted by the Monterey joint development agreement (the "JDA"). (Ex. 33 at Interrogatory Response No. 7.)

SCO's Response: SCO has alleged and has evidence of a broad array of fraudulent and deceptive conduct by IBM in connection with Project Monterey. SCO's unfair competition claim concerning Project Monterey is not merely for "use of code outside the scope of a license." (See above ¶¶ I.11-I.12; SCO AMF ¶¶ S.25-S.74.)

IBM's Reply: Following the Novell decision, SCO's unfair competition claim is limited to Project Monterey, and the specific allegations disclosed in SCO's interrogatory responses. There is no evidence that IBM engaged in fraud or deceit. Nor does SCO have standing to pursue such a claim against IBM concerning Project Monterey. (IBM's Reply Br. at 15-20.)

86. [I.14] Santa Cruz was aware of the allegedly improper inclusion of Santa Cruz code in AIX for Power by August 2000. (Ex. 227 ¶ 16; see also Exhibits to the Declaration of Todd M. Shaughnessy in support of IBM's opposition to SC0's Motion for Leave to File a Third Amended Complaint (Docket # 345).)

SCO's Response: SCO disputes that Santa Cruz was aware by August 2000 that IBM had improperly included Santa Cruz code in AIX for Power. Neither Santa Cruz nor SCO knew, or had reason to know, of IBM's improper inclusion of Santa Cruz code in AIX for Power until 2004, or at the least March 2001. (SCO AMF ¶¶ S.70-S.72.)

IBM's Reply: The Santa Cruz officer in charge of Project Monterey had actual knowledge that IBM included the SVr4 code in AIX for Power as early as August 2000, and his knowledge is imputed to the company. (IBM's Reply Br. at 7.) That SCO's declarants purport not to have had personal knowledge of the allegedly improper inclusion of Santa Cruz code in AIX for Power by August 2000 does not show otherwise.

87. [I.15] SCO alleges that IBM began copying Santa Cruz code obtained through Project Monterey into AIX in October 2000. (See Ex. 41 at Interrogatory Response No. 8.) In an expert report submitted on behalf of SCO, Dr. Christine Botosan writes "I have been asked to assume that IBM engaged in unfair competition by misusing code provided in Project Monterey to strengthen IBM's proprietary AIX product. I have been told that the disgorgement of IBM's subsequent AIX profits is an appropriate remedy for such unfair competition and that the date from which disgorgement should begin is October 1, 2000." (Ex. 171 at 3-4.)

SCO's Response: SCO does not dispute that IBM began distributing the SCO code copied into AIX for Power beginning in October 2000. However, the October 2000 distribution was a beta test primarily limited to certified software developers, with no public "generally available" distribution until May 2001. (SCO Ex. 289; IBM Ex. 229 at 30:12-15,
30:22-31:10, 33:8-23,107:21-32; SCO Ex. 229; SCO Ex. 82 at 3-4.)

IBM's Reply: SCO's response is beside the point of the IBM's asserted fact.

88. [I.18] Both IBM and Santa Cruz were interested in attempting to leverage and strengthen their existing UNIX-like operating system products as part of Project Monterey. The goal was to develop and market a "family" of UNIX-like operating system products, including a "Monterey/64" version for the IA-64 Intel processor, a version to run on IBM's proprietary "Power" processor architecture and a version to run on the IA-32 architecture. (Ex. 23; Ex. 24; Ex. 25; Ex. 245.)

SCO's Response: The JDA contemplated the use of Santa Cruz's expertise and technology, particularly its SVr4 and UW7 codes, only for development of the defined "IA-32 Product" and an "IA-64 Product" (IBM Ex. 245 at §§ 1.9, 1.10) - and not the use of Santa Cruz's expertise and technology, particularly its SVr4 and UW7 codes, for development of an operating system "version to run on IBM's proprietary 'Power' processor architecture."

IBM's Reply: SCO's assertion is unsupported by the cited evidence. In any case, the assertion is immaterial to the present motion for summary judgment.

89. [I.20] In furtherance of IBM and Santa Cruz's intention to create a compatible family of products, both companies granted licenses to the other. (Ex. 245.) For its part, IBM granted Santa Cruz a royalty-free license to certain AIX source code for Santa Cruz's use in its UnixWare product for the existing 32-bit Intel processor. (Ex. 245 §2.0(c)(2).) In turn, Santa Cruz granted IBM a royalty-free license to certain UnixWare source code for IBM's use in its AIX operating system tailored to run on IBM's Power architecture processor. (Ex. 245 §2.0(d)(2); Ex. 227 ¶ 16.) Each party also granted the other a license to use any code supplied during Project Monterey for the development of the operating system that would be marketed for use on the forthcoming IA-64 product. (Ex. 245 §§ 2.0(c)(2), 2.0(d)(2).)

SCO's Response: Section 2.0(d)(2) of IBM Exhibit 245 was not, however, the final agreement between the parties on this point. The JDA was subsequently modified by Supplement B to make clear the licenses were "to be used solely for development of the IA-64 Product" and that IBM would not receive a royalty-free license to any UnixWare source code for IBM's use in its AIX for Power operating system unless and until Release 1 of the IA-64 Product was released. The JDA and Supplement B were then further clarified by Amendment 5 which in effect defined "Release 1" to be a "Generally Available" product release. (SCO Ex. 81 at § 4 (JDA Supplement B); SCO Ex. 85 at 1710013964 (JDA Amendment 5)) (any release prior to "Generally Available" defined as "Pre-Release").

90. [I.23] Section 15.2 of the JDA, entitled "Change of Control," provides:

Notwithstanding Section 15.1, IBM shall have the right to terminate this Agreement immediately upon the occurrence of a
Change of Control of SCO which IBM in its sole discretion determines will substantially and adversely impact the overall purpose of the cooperation set forth by this Agreement and applicable Project Supplements or will create a significant risk or material and adverse exposure of IBM's confidential and/or technical proprietary information (which is subject to, and to the extent of, confidentiality restrictions) ("Information"). For the purposes of this Agreement, control shall be deemed to be constituted by rights, contract or any other means which, either separately or jointly and having regard to the consideration of fact or law involved, confer the possibility of exercising decisive influence (other than by an entity currently exercising such influence or any entity controlled by or controlling such entity) on SCO by: (1) owning more than half the equity, capital or business assets, or (2) having the power to appoint more than half of the members of the supervisory board, board of directors or bodies legally representing SCO, or (3) having the right to directly manage SCO's business activities.

(Ex. 245.)

SCO's Response: IBM deceived Santa Cruz and SCO into believing that IBM would not invoke this provision and would continue the Monterey venture after the closing of the Santa Cruz-SCO transaction. (SCO AMF ¶¶ S.61-S.68.)

IBM's Reply: SCO's assertion is unsupported by the cited evidence. In any event, SCO lacks standing to pursue a claim for breach of the Project Monterey agreement, which IBM terminated as expressly permitted by the JDA. (IBM's Reply Br. at 18-20.)

91. [I.24] Section 22.12 ofthe JDA, which is entitled "Assignment," provides, in part: "Neither party may assign, or otherwise transfer, its rights or delegate any of its duties or obligations under this Agreement without the prior written consent of the other party."

(Ex. 245.)

SCO's Response: IBM deceived Santa Cruz and SCO into believing that IBM intended to consent to the assignment and continue the Monterey venture with Caldera after the closing of the Santa Cruz-Caldera transaction. (SCO AMF ¶¶ S.61-S.68.)

IBM's Reply: SCO's assertion is unsupported by the cited evidence. In any event, SCO lacks standing to pursue a claim for breach of the Project Monterey agreement, which IBM terminated as expressly permitted by the JDA. (IBM's Reply Br. at 18-20.)

92. [I.25] Section 22.3 of the JDA, which is entitled "Choice of Law/Venue", provides:

This Agreement shall be governed by, and the legal relations between the parties hereto shall be determined in accordance with, the substantive laws of the State of New York, without regard to the conflict of law principles of such State, as if this Agreement was executed and fully performed within the State of New York. Each party hereby waives any right to a trial by jury in any dispute arising under or in connection with this Agreement, and agrees that any dispute hereunder shall be tried by a judge without a jury. Any legal or other action related to a breach of this Agreement must be commenced no later than two (2) years from the date of the breach in a court sited in the State of New York.

(Ex. 245.)

SCO's Response: SCO disputes that this provision is relevant to SCO's unfair competition claim.

IBM's Reply: Section 22.3 of the JDA applies to SCO's unfair competition claim. Section 22.3 expressly governs "[a]ny legal or other action related to a breach of this Agreement", and SCO's unfair competition claim is directly "related to" such an alleged breach. SCO specifically asserts that "[a]s a result of the formal agreement between SCO and IBM and the numerous representations made by IBM that were calculated to be relied upon by SCO, IBM had a fiduciary obligation to SCO that required IBM to be forthright and truthful in all affairs related to the partnership relationship". (¶ 1l(c).) Thus, SCO itself identifies the basis of its unfair competition claim as IBM's alleged breach of a duty that purportedly arose from the JDA.

93. [I.26] Although development of the Project Monterey IA-64 operating system proceeded throughout 1999 and 2000, the project encountered substantial difficulties due to delays in Intel's IA-64 processor development schedule. Intel's release of the initial Intel IA-64 processor, code-named "Merced" and officially named Itanium, was substantially delayed. In 1995 and 1996, executives of Itanium co-developer HP hinted that the processor was well underway, and might ship as early as 1997. That date came and went, and eventually 1999 was stated as the target. But that date also came and went. Itanium did not end up shipping until mid-2001. (Ex. 22; Ex. 186 ¶ 57; Ex. 394.)

SCO's Response: These delays did not justify IBM's concealment of its decision to drop the UNIX-based Monterey solution in favor of its Linux strategy, its breaches of fiduciary duties, or IBM's misappropriation of SantaCruz's SVr4 code. (SCO AMF ¶¶ S.25-S.74.)

IBM's Reply: SCO's response is unsupported by admissible evidence. There is no evidence that IBM dropped Project Monterey in favor of Linux or concealed such a decision, possessed or breached any fiduciary duty to SCO, or misappropriated SCO's code. (IBM's Reply Br. at 11-18.) In any case, none of these allegations, even if true, gives rise to a claim for unfair competition by SCO against IBM.

94. [I.27] Once Itanium did arrive, it performed poorly relative to alternatives in the marketplace. As a result, Intel and HP re-positioned it as primarily an evaluation and development platform, a precursor to the second-generation Itanium 2 "McKinley" release that would enable true production deployments. Neither IBM nor Santa Cruz had any involvement in - or control over - the development of the Itanium processor. (Ex. 26; Ex. 28; Ex. 186 ¶ 58.)

SCO's Response: These performance deficiencies did not justify IBM's concealment of its decision to drop the UNIX-based Monterey solution in favor of its Linux strategy, its breaches of fiduciary duties, or IBM's misappropriation of Santa Cruz's SVr4 code. (SCO AMF ¶¶ S.25-S.74.)

IBM's Reply: SCO's response is unsupported by admissible evidence. There is no evidence that IBM dropped Project Monterey in favor of Linux or concealed such a decision, possessed or breached any fiduciary duty to SCO, or misappropriated SCO's code. (IBM's Reply Br. at 11-18.) In any case, none of these allegations, even if true, gives rise to a claim for unfair competition by SCO against IBM.

95. [I.28] In addition to creating development difficulties, these delays caused a decrease in market interest and confidence in the forthcoming IA-64 product and thereby the IA-64 operating system then under development by IBM and Santa Cruz. (Ex. 26; Ex. 28; Ex. 186 ¶ 59.)

SCO's Response: These performance deficiencies did not justify IBM's concealment of its decision to drop the UNIX-based Monterey solution in favor of its Linux strategy, its breaches of fiduciary duties, or IBM's misappropriation of Santa Cruz's SVr4 code. (SCO AMF ¶¶ S.25-S.74.)

IBM's Reply: SCO's response is unsupported by admissible evidence. There is no evidence that IBM dropped Project Monterey in favor of Linux or concealed such a decision, possessed or breached any fiduciary duty to SCO, or misappropriated SCO's code. (IBM's Reply Br. at 11-18.) In any case, none of these allegations, even if true, gives rise to a claim for unfair competition by SCO against IBM.

96. [I.29] Despite the delays in the launch of the IA-64 processor, in late April 2001, IBM and Santa Cruz announced the first release of AIX 5L for the IA-64 processor on May 4, 2001. (Ex. 593; Ex. 594; Ex. 595.) That release occurred as scheduled. (Ex. 10 ¶ 236; Ex. 259 at 44.)

SCO's Response: SCO disputes that the so-called "release" of that product - which had no compiler and no support - constituted a "release," and contends that this was a mere pretext by which IBM attempted to deceive Santa Cruz and SCO into believing that IBM had earned the right to use SVr4 code in AIX for Power. (SCO AMF ¶¶ S.49-S.60.)

97. [I.31] Santa Cruz did not obtain IBM's prior written consent to an assignment of the JDA. Instead, Santa Cruz informed IBM of the sale of its Server Software and Professional Services divisions and its UNIX-related assets to Caldera in a letter dated June 6, 2001. (Ex. 244.)

SCO's Response: IBM deceived Santa Cruz and SCO into believing that IBM would consent. (SCO AMF ¶¶ S.61-S.68.)

IBM's Reply: SCO has not tendered any admissible evidence of deceit. Nor would the alleged deceitful conduct give rise to an unfair competition claim by SCO against IBM. (IBM's Reply Br. at 15-18.)

98. [I.32] IBM declined to consent to the assignment of Santa Cruz's rights and obligations under the JDA. Pursuant to Section 22.12 of the JDA, IBM's consent was necessary for such assignment to take effect. On the contrary, IBM invoked its right to cancel the JDA under Section 15.2 in a letter dated June 19, 2001. (Ex. 220.)

SCO's Response: IBM deceived Santa Cruz and SCO into believing that IBM would consent and would continue with Project Monterey. (SCO AMF ¶¶ S.61-S.68.).

IBM's Reply: SCO has not tendered any admissible evidence of deceit. Nor would the alleged deceitful conduct give rise to an unfair competition claim by SCO against IBM. (IBM's Reply Br. at 15-18.)

99. [I.33] Caldera did not acquire Santa Cruz, which continued in business, albeit changing its corporate name to "Tarantella." (Ex. 244.)

SCO's Response: Santa Cruz transferred to Caldera its SVr4 code and its unfair competition claims against IBM. (SCO Ex. 113 at § 1.4; SCO Ex. 114 at ¶¶ 1-9; SCO Ex. 30 at ¶ 2; SCO Ex. 115 at § 1.)

IBM's Reply: The litigation rights that purportedly were transferred to SCO when it purchased Santa Clara's UNIX related assets govern only intellectual property claims. The assignment does not include the assignment of rights for business torts such as SCO's claim that IBM breached an alleged fiduciary duty by not disclosing to Santa Cruz that it purportedly intended to abandon Project Monterey and instead support Linux.

Because SCO was not a party to the JDA and it has not come forward with any evidence that it was assigned the rights to sue for an alleged breach of a fiduciary duty related to that JDA, it does not have standing to assert that claim. (IBM's Opening Br. at 21-23.)

100. [I.35] SCO has not adduced - and cannot adduce - any evidence to show that IBM engaged in unfair competition, despite three orders of the Court requiring SCO to disclose all such evidence.

SCO's Response: SCO has come forward with more than ample evidence that IBM engaged in unfair competition. (SCO AMF ¶¶ S.25-S.74).

IBM's Reply: SCO's purported additional facts are immaterial and/or unsupported by admissible evidence.

Section 3

DISPUTED ADDITIONAL FACTS FROM SCO'S OPPOSITION


101. [S.23] The JDA was an agreement to create an enterprise for profit; it provided for mutual contributions of property and other resources; it called for a measure of joint control over the enterprise; and it required sharing of profits and losses. (IBM Ex. 245 (JDA) at Preamble and §§ 2.0(a), 4.0, 5.1, 8.0-8.11, 11.3, 12.0-12.5; Ex. 81 (JDA Supplement B) at § 4 and Attachments 3 and 4.)

IBM's Response: IBM and Sana Cruz unambiguously agreed not to form a joint venture or partnership as stated in Section 22.5 of the JDA, which provides: "This Agreement shall not be construed to establish any form of partnership, agency, franchise or joint venture of any kind between SCO and IBM, nor to constitute either party as an agent, employee, legal representative, or any other form of representative of the other. This Agreement shall not be construed to provide for any sharing of profits or losses between the parties." (IBM Ex. 245, § 22.5.)

SCO's Reply: IBM's response does not rebut any of the facts in this paragraph. These facts reflect the economic realities of the relationship created by the JDA, rather than mere labels. (See SCO Opp'n Br. at 36-37 n.6 ("Although the JDA contains a provision disclaiming an intent to form a joint venture, the courts look to economic realities and disregard labels when the agreement as a whole and surrounding facts show an intent to create such a relationship. Moreover, a fiduciary relationship arises 'in all cases in which influence has been acquired and abused,' even if the business relationship is less than a joint venture.") (citations omitted).)

102. [S.24] Consistent with that arrangement, IBM repeatedly referred to SCO as a "partner" during the course of Project Monterey:

    a. On May 6, 1998, IBM stated its intent to form a "tight partnership with SCO." (Ex. 189 at 1710117588 (emphasis added).)

    b. In 2000, one IBM employee cautioned: "we need to recognize that we must treat [SCO] as we would another business partner and follow the appropriate rules and laws regarding . . . competitive issues." (Ex. 218 at 181427972 (emphasis added).)

    c. Even as late as 2002, IBM discussed internally that "due to our partnership with SCO, we have been able to make AIX closer to SVR4 as best we can." (Ex. 205 at 181017195 (emphasis added).)

IBM's Response: As stated above, the parties unambiguously agreed not to form a joint venture or partnership. (IBM Ex. 245, § 22.5.)

SCO's Reply: As above, IBM's response does not rebut any of SCO's facts, and the law looks to the realities, rather than to the labels, of the parties' relationship.

103. [S.25] As the evidence cited in the following paragraphs will show, IBM, in disregard of its partnership and confidentiality obligations to SCO, secretly transitioned its efforts and focus away from Project Monterey - while continuing the pretext of support and publicly proclaiming its continued commitment to the project. This was because, after entering into Project Monterey, IBM decided that a competing system, Linux, rather than the Project Monterey Operating System, offered a more profitable entryway for IBM into the UNIX-on-Intel market. Yet IBM could not overtly withdraw from Monterey without raising legal issues and forfeiting the opportunity to obtain needed SVr4 code for free.

IBM's Response: The assertions in this paragraph are made without evidentiary citation or support. SCO cites no evidence that IBM had or disregarded confidentiality obligations to SCO; secretly transitioned away from Project Monterey while feigning support of the project; or impermissibly terminated Project Monterey to pursue Linux.

SCO's Reply: This paragraph summarizes the facts set forth with extensive evidentiary citation and support in the ensuing paragraphs S.26 to S.75.

104. [S.34] Notwithstanding these recommendations and predictions, IBM did not "drop Monterey" - at least not publicly and not to SCO. (Ex. 17 at ¶ 10; Ex. 354 at ¶ 15; Ex. 362 at ¶ 14.) Rather, without telling SCO, IBM continued to string Monterey along while it tried "to make Linux scale up as quickly as possible." (Ex. 235 at 181668964.) By June 2000, the IBM Academy of Technology OS Consultancy recommended a "significant reduction in emphasis" in Monterey and that IBM "should further develop for Monterey only what is in common with Power." (Ex. 239 at 181291944 (emphasis added).)

IBM's Response: IBM did not string along Project Monterey to gain access to the SVr4 code. Instead, the evidence that SCO cites to support this claim demonstrates nothing more than the fact that IBM was aware of and sensitive to its contractual obligations to Santa Cruz (not SCO) with respect to the SVr4 code. (See, e.g., SCO Exs. 96, 198, 371.) Moreover, the alleged stringing along of Santa Cruz does not amount to unfair competition actionable by SCO.

SCO's Reply: The documents cited in IBM's response show, among other things, that IBM personnel were aware that "SCO has the rights to all the code if we cancel the project" (Ex. 96), that IBM personnel "believe[d] the SCO agreement states that if we don't ship the code when we GA [i.e., make 'generally available'] Monterey, we will lose rights to the code" (Ex. 198), and that in evaluating its strategic alternatives, IBM recognized that one of the "Cons" of a strategy in which it overly "Drop[ed] UnixWare from the Project Monterey line and fulfill[ed] the 'low end' need with . . . IBM Monterey Linux" - thus "eliminat[ing]" SCO - was that it would result in "Loss of access to UNIX SVR4/5 technologies for Monterey product line (if SCO does not accept shift to Linux business)" (Ex. 371). Taken together with the evidence of IBM's pretextual, non-functional beta-test version of the Monterey product (described in SCO AMF ¶¶ S.49-S.60), the evidence show that IBM did string along Project Monterey to gain access to the SVr4 code. IBM's assertion that "the alleged stringing along . . . does not amount to unfair competition" is a legal argument that does not rebut any of the facts set forth in this paragraph or elsewhere.

105. [S.44] IBM acknowledged SCO's intellectual property rights in SVr4 when it twice sought - but failed - to obtain from SCO - the right to use SVr4 code in AIX for Power without a Release 1 of the IA-64 Product.

a. In March 1999, IBM proposed an Amendment 2 to the JDA, which would have given IBM the right, among other things, to use SVr4 source code without royalties (and without a Release 1 of the IA-64 Product) in AIX for Power. However, this proposed amendment was never signed as the parties could never agree upon final terms. (Ex. 94.)

b. From about March through October 1999, by proposing a Supplement C, IBM again attempted to obtain the right to use SVr4 source code in AIX for Power prior to Release 1 of the IA-64 Product. (Ex. 296 at SCO1241726; Ex. 297 at 181506932.) Internally, IBM acknowledged that Supplement C was "for licensing UW7 technology to AIX in advance of the license we would get from Monterey." (Ex. 297 at 181506932.) SCO viewed the draft Supplement C and the nature of the negotiations as an "end around" SCO's right to certain royalties for the IA-64 Product. (Ex. 299 at SCO1234593; Ex. 298 at SCO1234593; Ex. 297 at 181506932.) Again, this agreement was never signed because the parties could not agree upon the terms. (Ex. 354 ¶¶ 10-11 and Ex. A thereto).)


IBM's Response: The fact that IBM allegedly considered entering an agreement with SCO regarding the IA-64 product, but then did not, does not show that IBM "affirmatively indicated approval" of the SCO-Santa Cruz transaction as SCO alleges. (SCO ¶ 64.)

SCO's Reply: IBM's response does not rebut any of the facts in this paragraph.

106. [S.49] IBM's "solution" to the problem of the SVr4 code was to put out a pretextual, non-functional PRPQ of the Monterey product, and then quickly terminate the Monterey agreement, leaving IBM with the valuable code and SCO with nothing, as set forth below. Contrary to JDA § 3.0, and for the purpose of sowing confusion, IBM unilaterally branded the so-called Monterey product "AIX 5L for IA-64" or "AIX 5L for Itanium."

IBM's Response: The May 2001 release of the Monterey product was not a "sham", and SCO has not offered any evidence showing that it was. In fact, the evidence cited by SCO actually undermines its position, as explained in IBM's reply brief. (IBM's Reply Br. at 16-17.) In any case, the release of an alleged sham PRPQ would not give rise to an unfair competition claim by SCO against IBM.

SCO's Reply: IBM's conclusory denial and citation to is legal brief do not rebut any of the facts set forth in this paragraph or in paragraphs S.50 to S.60 showing that the May 2001 release of the Monterey product was a sham and that, as stated by IBM's Ron Saint Pierre on November 1, 2001, "Monterey has not gone GA [generally available] and never will." (Ex. 86 at 1710066677.) IBM's assertion that "the release of an alleged sham PRPQ would not give rise to an unfair competition claim" is a legal argument that does not rebut any of the facts set forth in this paragraph or elsewhere.

107. [S.63] Although IBM thus had notice of the pending transaction for almost a year, IBM never told Santa Cruz or Caldera that it would not consent to the assignment of the JDA from Santa Cruz to Caldera. IBM's consent was important because, under Section 15.2 of the JDA, IBM was able to cancel the JDA in the event of a change of control. IBM led Santa Cruz and Caldera to believe that it would not cancel their joint efforts and, in fact, IBM sought and obtained assurances from Ransom Love and David McCrabb, the named CEO and COO of the new company, that they would continue to support Project Monterey. (Ex. 290, Ex. 334 at 181671481; Ex. 354, ¶¶ 12-13; Ex. 362, ¶¶ 10-11; Ex. 356 ¶ 6.)

IBM's Response: IBM did not conceal its intention to withhold consent to the assignment of the JDA, as explained in IBM's reply brief. (IBM's Reply Br. at 17.) In an email to a senior SCO employee dated June 19, 2001, a Santa Cruz employee stated that IBM's decision not to consent to the assignment "should come as no surprise to us, as Ron [Lauderdale of IBM] had told Benoy [Tamang of SCO] and me way back when that this would probably be the case". (IBM Ex. 619.)

SCO's Reply: IBM's reliance on a single e-mail from a Santa Cruz employee, Steve Sabbath, about what "Ron had told Benoy and me way back when" does not support IBM's position. In the portion of the e-mail not quoted by IBM, the Santa Cruz employee states: "Ron [Lauderdale of IBM] pointed out that the work done under the former SCO-IBM contract had been done, and all that remains is licensing rights and royalties. Ron said that if any future work (e.g. joint development) was to be done by Caldera and IBM, his preference was to enter a new and updated contract. Off the top of my head, then, I don't see that this refusal causes any issues. . . . I do think that if IBM wants to be cute, there may be some red tape to work through, but I do think that there is always going to be a route that can be found." (IBM Ex. 619.) As this portion of the e-mail indicates, whatever he had been told "way back when" did not lead him to conclude that IBM intended to discontinue its support of Project Monterey.

108. [S.69] As part of the May 2001 transaction in which Caldera/SCO acquired the UNIX business and assets, Santa Cruz assigned to SCO all of Santa Cruz's "right, title, and interest" in the Contributed Assets, which consisted of Santa Cruz's entire UNIX business, including the SVr4 code that IBM misappropriated into AIX for Power. (Ex. 113 at § 1.4; Ex. 114 ¶¶ 1-9; Ex. 30 ¶ 2; Ex. 115 at § 1). SCO also acquired all of Santa Cruz's "rights and privileges pertaining to" this intellectual property, including all "rights to enforce confidentiality or similar obligations" in relation to the code, "the right, if any, to sue or bring other actions for past, present and future infringement thereof," and "any and all other forms of intellectual
property right or proprietary right recognized anywhere in the world." (Ex. 115 (IP Assignment) at §§ 1(v)-(vii).)

IBM's Response: Santa Cruz lacked authority to transfer all of its rights under Project Monterey. SCO never was a party to the JDA and does not have any rights to sue for a breach of that contract. (IBM's Opening Br. at 21-23.) Any assignment SCO obtained from Santa Cruz was not legally enforceable, and does not provide SCO with standing to assert its proposed Monterey claim. The IP Assignment governs only intellectual property claims. It does not include the assignment of rights for business torts such as SCO's claim that IBM breached an alleged fiduciary duty by not disclosing to Santa Cruz that it purportedly intended to abandon Monterey and instead support Linux.

SCO's Reply: IBM's response consists solely of legal argument without citation to record evidence and does not rebut any of the facts set forth in this paragraph or elsewhere.

109. [S.70] SCO was not aware of IBM's duplicity in March 2001. (Ex. 354 ¶¶ 16-18; Ex. 362 ¶ 15). At this time, SCO's management did not know, and had no reason to know, that IBM had placed SCO's SVr4 code into AIX 5L for Power. SCO also did not know then that IBM had abandoned Project Monterey, that IBM had no intent of issuing a generally available Monterey product, or that IBM was solely interested in deceptively securing the rights to SCO's SVr4 code for other products. SCO had no reason to suspect IBM's malfeasance until April-June 2001, when IBM announced and delivered both its first "generally available" release of AIX 5L for Power containing SVr4 code and the premature PRPQ of the Project Monterey operating system, promptly followed by the cancellation of the JDA. (Ex. 354 ¶¶ 16-18; Ex. 362 ¶ 15; Ex. 351¶ 16; Ex. 17 ¶ 10).

IBM's Response: SCO's citations do not evidence duplicity or deception. Nor do they show that IBM abandoned Project Monterey or had no intent of issuing a Project Monterey product. IBM has offered unrefuted evidence that at least one Santa Cruz executive was aware of the allegedly improper inclusion Santa Cruz code in AIX for Power by August 2000.
(IBM's Opening Br. ¶ 14.)

SCO's Reply: IBM's duplicity and deception are evidenced throughout SCO's Statement of Additional Material Facts (see ¶¶ S.25-S.75), and IBM's conclusory denial lacks citation or support. IBM's assertion that it has "offered unrefuted evidence" is false. IBM's proffered evidence is refuted by the evidence set forth in paragraphs S.70 to S.72.

110. [S.71] IBM incorrectly asserts that SCO was aware of the allegedly improper inclusion of the SVr4 code in AIX for Power by August 2000.

a. The first document IBM relies on is a February 2000 presentation prepared by SCO in which SCO spoke prospectively about the Project Monterey roadmap and accurately reflected the agreement and intent of the parties that after a generally available Release 1 of the IA-64 product, then SVr4 code would be used to enhance AIX for Power. (Ex. 292.)

b. The second document IBM relies on is an August 11, 2000 internal Santa Cruz email circulating an IBM press release that opens with the announcement IBM would be releasing versions of AIX 5L for Power (IBM's own proprietary system) and AIX 5L for IA-64 (IBM's name for the jointly developed Project Monterey Operating System). Contrary to IBM's assertion that it "makes clear" SVr4 was in AIX for Power, the release only speaks generally of AIX 5L without distinguishing between the Power and IA-64 architectures. (Ex. 293.)

c. The third document, a May 2, 2001 webpage screenshot is equally unclear in its reference to "AIX 5L" and does not distinguish between the two architectures. In any event, May 2001 is after March 2001 and thus is within two years of the date on which SCO filed this suit. (Ex. 294.)

d. The fourth document, is an undated (but from the context apparently late Summer 2000) outline which purports to summarize differences between AIX for Power and AIX for IA-64, and is claimed to show that the SVr4 print subsystem is in both offerings. To the contrary, the stand-alone bullet point "SVR4 subsystem" does not clearly indicate that it is in the AIX for Power product and, moreover, in the context of statements on the second page of the memorandum noting print subsystem differences, the meaning of this bullet point is ambiguous at best. (Ex. 295.)

e. Finally, SCO had no knowledge of the industry reports IBM points to, which were not widely circulated at the time and were not sent to SCO. (Ex. 354 ¶ 19; Ex. 362 ¶ 16.)


IBM's Response: Santa Cruz was aware of the allegedly improper inclusion of Santa Cruz code in AIX for Power by August 2000. (Ex. 227 ¶ 16; see also Exhibits to the Declaration of Todd M. Shaughnessy in support of IBM's opposition to SCO's Motion for Leave to File a Third Amended Complaint (Docket# 345).) The Santa Cruz officer in charge of Project Monterey had such knowledge as early as August 2000 (IBM's Opening Br. at ¶ 14), and his knowledge is imputed to the company. While SCO attempts to create a dispute as to its knowledge through the declarations of three individuals who state that they did not personally know that IBM included the SVr4 code in AIX for Power in 2000 (SCO ¶ 70), those individuals cannot testify as to what others at the company knew in 2000.

SCO's Reply: IBM's suggestion that a September 2006 statement obtained by IBM of a single former Santa Cruz employee (IBM Ex. 227) is somehow "imputed to the company" is incorrect. In a case that IBM itself cites (IBM Reply Brief at 7), the court confirmed that "[t]he question of imputation of knowledge is a question of fact which must be resolved in light of all the circumstances of the case." Seward Park Hous. Corp. v. Cohen, 734 N.Y.S.2d 42, 51 (N.Y. App. Div. 2001) (quoting Cohen v. Hallmark Cards, Inc., 382 N.E.2d 1145, 1148-49 (N.Y. 1978)). Moreover, even if the former employee's September 2006 statement about what he knew in August 2000 is credited, it does not refute the evidence set forth in paragraphs S.70 to S.72. In addition, SCO objects to the extent that IBM's citation to "Exhibits to the Declaration of Todd M. Shaughnessy in support of IBM's opposition to SCO's Motion for Leave to File a Third Amended Complaint" refers to documents that were not submitted as part of IBM's summary judgment motion. See DUCivR 56-1(f).

111. [S.76] SCO was damaged by IBM's concealment of its intention to cancel Project Monterey, from IBM's misappropriation of the SVr4 code, and the subsequent cover-up. IBM benefited greatly from that misconduct. SCO expert Marc Rochkind has described the substantial SVr4 technology that IBM misappropriated and put into its AIX for Power operating system. (Ex. 287 at 152). IBM's improper actions, which enhanced AIX for Power and gave rise to a free-of-charge Linux operating system that directly competed with SCO's own proprietary operating systems, greatly harmed SCO's business and its ability to compete. (Ex. 281 at 62-68; Ex. 284 at 47-56; Ex. 286 at 20-26.) SCO's damages from IBM's wrongful action are set forth in detail in the expert report and rebuttal report of Christine Botosan (Ex. 270 at 3-4,
10-12; Ex. 272 at 8-9, 24-25) and the rebuttal report of Gary Pisano (Ex. 286 at 76-77), which are incorporated herein by reference.

IBM's Response: IBM disputes that SCO was damaged, as explained in IBM's reply brief. (IBM's Reply Br. at 18 n.12.) SCO's only discussion of damages regarding its unfair competition claim is contained in the expert report of Christine Botosan. However, Ms. Botosan's discussion relates only to SCO's claim that IBM's use of the SVr4 technology in AIX for Power was improper, and her analysis is restricted to a calculation of the profits that IBM earned from that alleged misconduct. (SCO Ex. 270; SCO Ex. 286; SCO ¶ 76.) SCO's Mr. Pisano was offered as a rebuttal witness and thus could not properly be used to support an affirmative claim for damages. In any case, his report merely addresses the theoretical competitive advantage of greater compatibility with Solaris and makes no effort to show damages due to unfair competition. (SCO Ex. 286 at 76-77.)

SCO's Reply: IBM's argumentative characterizations of SCO's damages evidence are incorrect. The experts' opinions speak for themselves. Mr. Pisano states, among other things:

I understand that IBM obtained certain SVR4 code from SCO through Project Monterey, and incorporated that code into AIX. I further understand that IBM used the code for the purpose of enhancing AIX's affinity with Solaris. . . . It is my opinion that, in so far as this code enhanced AIX's affinity with Solaris, it was highly valuable to IBM and key to IBM's AIX revenues.


(Ex. 286 at 76-77 (emphasis added).) IBM does not cite any authority for its contention that Mr. Pisano's opinion, disclosed to IBM on August 28, 2006, should not be admitted in support of SCO's unfair competition claim.

In addition, Ms. Botosan has calculated the appropriate measure of recovery due to SCO related to IBM's acts of unfair competition on the understanding that "disgorgement of IBM's subsequent AIX profits is an appropriate remedy for such unfair competition." (Ex. 270 at 3-4.)

112. [S.77] SCO incorporates by reference the facts set forth in SCO's Memorandum in Opposition to IBM's Motion for Summary Judgment on IBM's Eighth Counterclaim, SCO's Memorandum in Opposition to IBM's Motion for Summary Judgment on SCO's Contract Claims, SCO's Memorandum in Opposition to IBM's Motion for Summary Judgment on SCO's Interference Claims, SCO's Memorandum in Opposition to IBM's Motion for Summary Judgment on IBM's Tenth counterclaim, SCO's Memorandum in Opposition to IBM's Motion for Summary Judgment on SCO's Unfair Competition Claim, and SCO's Memorandum in Opposition to IBM's Motion for Summary on SCO's Copyright Claim.

IBM's Response: SCO's incorporation by reference does not comply with the local rules and does not require a separate response.

SCO's Reply: SCO reserves its rights to refer the materials set forth in paragraph S.77 in opposition to this motion.

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Steven W
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2015-09-04 06:22 »

Here's the "supplement letter" attached to 1158:

uly 20, 2015
VIA ECF AND E-MAIL

Judge David O. Nuffer
U.S. District Court
351 S. West Temple, Room 10.100
Salt Lake City, UT 84101


Re: The SCO Group, Inc. v. IBM Corp., No. 2:03-cv-0294-DN

Dear Judge Nuffer:

As you know, we represent Plaintiff/Counterclaim Defendant, The SCO Group, Inc. ("SCO"), in this action. Pursuant to this Court's Orders of June 12, 2015, and July 14, 2015, SCO filed today a Statement attempting to reconcile "IBM's Statement of Undisputed Facts" and "SCO's Statement of Additional Material Facts" in connection with IBM's Motion for Summary
Judgment on SCO's Unfair Competition Claim (SCO's Sixth Cause of Action) [Docket No. 782]. Unfortunately, although the Court clearly directed the parties to file a Joint Statement, IBM informed SCO for the very first time today that IBM was not going to agree to a joint submission unless SCO adopted IBM's eleventh-hour proposal to radically reformat the document and provide the Court with only redlines to the parties' respective statements of facts instead of a document identifying, as the Court directed, "(1) a set of numbered, undisputed facts, with citations to evidence, as required by DUCivR 56-1(b)(2), (2) any remaining disputed facts from IBM's [782] motion, and (3) any remaining disputed additional facts from SCO's
opposition brief." SCO informed IBM that SCO disagreed with IBM's view that its last-minute proposal would be more useful to the Court than the document the Court directed the parties to submit and most importantly that IBM's changes did not comply with the Court's specific directive. After considering its options, IBM informed us late this afternoon that it was going to proceed to file its own submission and abandoned the notion of a Joint Statement.

For the Court's reference, below is a brief summary of the history of SCO's sustained efforts to reach a finalized Joint Submission. Following the June status conference and the Court's related June 12, 2015, Order, SCO reached out to IBM to meet and confer on preparing a joint submission reconciling the facts. The parties met and conferred on June 29. Thereafter, SCO sent IBM a draft of the document with the following cover note:

As per our discussion yesterday, we undertook to create a draft Joint Statement of Undisputed Facts pursuant to the Court's request that the parties do so to facilitate the Court's consideration of IBM's motion for Summary Judgment on SCO's Unfair Competition claim. (The first attachment is the clean Joint Statement of Undisputed Facts; the second
attachment blacklines the draft against IBM's original Statement of Facts for ease of reference.) In addition to revising IBM's Statement of Facts by narrowing it down to the facts we believe can jointly be submitted as undisputed facts, we also included in the document a word version of SCO's Statement of Additional Facts. We would propose that you review
the draft and send along (i) any comments on the revisions to the IBM portion of the Joint Statement of Undisputed Facts and (ii) proposed revisions, if any, to SCO's Statement of Additional Undisputed Facts by identifying facts that you believe are disputed.

On July 8, more than one week later and just three days before the deadline for the Joint Statement, SCO again wrote to IBM: "Please let us know when we can expect your comments, as we would like to make sure we are in good shape to meet the Court's deadline." IBM finally sent SCO revisions to the draft later that day, accepting many of the undisputed facts, revising others, but deleting all 78 paragraphs of SCO's Additional Facts. SCO indicated that it would agree to most of IBM's proposed insertions but that IBM's deletion of all of SCO's facts was obviously unacceptable.

On July 10, two days before the submission was due, IBM informed SCO that IBM would not agree to submit any Statement that included any of SCO's Additional Facts. When SCO's counsel reminded IBM that the Court had directed the parties to reconcile both sets of facts, IBM contended that the Court did not direct the parties to reconcile SCO's Additional
Facts as part of the Joint Statement, and IBM stated that it had never previously undertaken to respond to SCO's Additional Facts individually, that IBM was unwilling to do so now, and that IBM generally disputed all of SCO's Additional Facts. SCO offered to revise the Joint Submission to include both parties' facts along with an introduction summarizing IBM's position regarding SCO's facts. IBM still refused to agree to the Statement and asked SCO if it would agree to a one-week extension. SCO informed IBM that SCO would not oppose IBM's request if IBM genuinely committed to reconciling the facts.

In response to IBM's adjournment request, the Court made very clear precisely what it expected and informed IBM that failure to submit a Joint Submission was not acceptable. Nevertheless, IBM did not follow up with SCO to address the open issues at any point during the week. Concerned that it still had not heard from IBM and that the Court's deadline was just one business day away, SCO re-sent IBM the operative draft on July 17, which draft SCO updated to reflect the three specific categories the Court requested in its July 12 Order. On Friday evening, July 17, at 8 PM, IBM's counsel called us and informed us for the very first time that he had undertaken to create an entirely different type of submission. Specifically, IBM's counsel proposed a submission that would simply provide the Court with "redline" mark-ups of the
parties' existing statements of fact. He said he would send his proposed draft along later that night. SCO responded that we obviously did not expect IBM to propose an entirely new approach at the eleventh hour, and that we had already circulated the operative draft, which was consistent with the Court's Order and included the three sections that the Court had ordered. Undeterred, on Saturday afternoon, IBM sent us its "redline" mark-ups of both parties' statements of fact, which purported to re-write many of SCO's statements of fact without articulating any basis for its proposed changes.

This morning, we wrote to IBM and informed it that we were not prepared to abandon the Court's requested format of sections identifying Undisputed Facts, Disputed Facts from IBM's Motion, and Disputed Facts from SCO's Opposition. IBM considered its options and informed us late this afternoon that it was not willing to identify for us which of SCO's remaining
Additional Facts IBM disputed and that IBM was going to file its own statement as opposed to a Joint Statement. Accordingly, SCO submits herewith a copy of the draft in the format the parties had exchanged prior to IBM's last-minute change and refusal to proceed with the Joint Statement.


Sincerely,
/s/ Jason Cyrulnik
Jason Cyrulnik



cc: Amy F. Sorenson
David R. Marriott
Bent O. Hatch
Stuart Singer
Edward Normand

nazmun

2016-02-16 03:34 »

Moderator notes: Original thread subject: "It's about Linux".

I would like to share you a news---

SCO vs IBM Legal Battle Finally Over After 13 Years. you can read detail here http://www.hostingreviewbox.com/sco-vs-ibm-legal-battle-finally-over-after-13-years/

__________
By Bryan on February 11, 2016 - sco-ibm

In 2003, SCO filed a lawsuit against IBM, alleging that IBM had stolen proprietary source code from UNIX to strengthen its Linux products and service.

SCO’s suit sought $1bln in damages.

This lawsuit was monumental in that a win for SCO could effectively mean that every company in the world selling any kind of Linux based product would be liable for damages payable to SCO. SCO knew this and also sued several other companies such as Novell and Red Hat.

The main allegation that Linux used stolen code from UNIX was swiftly disproved in early stages of the court battle. But SCO consistently pursued the case using any legal means to keep it open and keep dragging the defendants into court.

Today, February 11th, 2016, the case was finally closed. The court ruled to disallow further appeals for SCO, and in perfect timing, SCO will also close, 9 years after they filed for bankruptcy protection in 2007.

References:

http://www.groklaw.net/articlebasic.php ... 1516065416
https://en.wikipedia.org/wiki/SCO_Group ... ovell,_Inc.
https://en.wikipedia.org/wiki/SCO/Linux_controversies
http://scofacts.org/other-cases.html

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!
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2016-02-16 10:27 »

Haha cool link... thanks for posting it! :thumbup: Although, I think this one fits best in "Steven W"'s huge thread about "SCO v. IBM" : viewtopic.php?f=4&t=2376. :clap:

I will move your post over there, I hope it's OK. :mrgreen:

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Steven W
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2016-05-03 03:39 »

OMG!

30-Mar-2016 USCA Case Number Case Appealed to Tenth Case Number 16-4040 for [1165] Notice of Appeal filed by SCO Group. (jmr) (Entered: 03/30/2016)


I'm not going to directly link to the PDF, but you can see all of this at Groklaw:

http://www.groklaw.net/staticpages/inde ... 6162215566

:crazy: It's the case that never ends! It goes on and on my friends!

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2016-05-03 06:37 »

Haha you know, I was going to post that here but forgot!!! Super funny! :clap: :mrgreen:

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