The text of IBM's counterclaims
The following is the text of IBM's counterclaims in the SCO case. We thank
Joe 'Zonker' Brockmeier for
the transcription work. A few thoughtful readers have sent in corrections, but there may still be a few more OCR scanner typos in this document.
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
________________________________________
THE SCO GROUP, INC., a Delaware ) DEFENDANT IBM'S ANSWER TO
corporation, ) THE AMENDED COMPLAINT AND
) COUNTERCLAIM-PLAINTIFF
Plaintiff/Counterclaim-Defendant,) IBM'S COUNTERCLAIMS
) AGAINST SCO
-against- )
) JURY TRIAL DEMANDED
INTERNATIONAL BUSINESS )
MACHINES CORPORATION, a New York ) Civil No. 2:03CV-0294 DAK
corporation, )
)
Defendant/Counterclaim-Plaintiff ) Honorable Dale A. Kimball
)
________________________________________
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In answer to the averments of the amended complaint of The SCO
Group, Inc., f/k/a Caldera International, Inc. ("SCO"), defendant
International Business Machines Corporation ("IBM"), by and through
its attorneys, avers as follows, based on personal knowledge as to
its own actions and intent and upon information and belief as to
the actions and intent of others:
NATURE OF THIS ACTION
1. Denies the averments of paragraph 1.
2. Denies the averments of paragraph 2 as they relate to IBM,
except refers to the referenced licenses for their contents and
states that IBM is without information sufficient to form a
belief as to the truth of the averments as they relate to any other
person or entity.
3. Denies the first two sentences of paragraph 3. States that
it is without information sufficient to form a belief as to the
truth of the third sentence of paragraph 3.
4. Denies the averments of paragraph 4 as they relate to IBM,
and states that IBM is without information sufficient to form a
belief as to the truth of the averments as they relate to any
other person or entity.
5. Denies the averments of paragraph 5.
6. Denies the averments of paragraph 6, except refers to the
referenced document for its contents.
7. Denies the averments of paragraph 7, except refers to the
referenced document for its contents.
8. Denies the averments of paragraph 8, except refers to the
referenced document for its contents.
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9. Denies the averments of paragraph 9.
10. Denies the averments of paragraph 10.
11. Denies the averments of paragraph 11.
PARTIES, JURISDICTION AND VENUE
12. Admits the averments of paragraph 12.
13. Admits the averments of paragraph 13.
14. Denies the averments of paragraph 14, except admits that
Sequent was formerly an Oregon corporation which was subsequently
merged into IBM.
15. States that the averments of paragraph 15 purport to state
a legal conclusion and do not require a response.
16. Denies the averments of paragraph 16, except admits that
IBM is transacting business within this state and is contracting to
provide goods and services within the state and states that, to the
extent they purport to state a legal conclusion, these averments
do not require a response.
17. Denies the averments of paragraph 17, except admits that
IBM maintains an office or place of business in this district.
BACKGROUND
18. Denies the averments of paragraph 18, especially insofar as
they purport to describe all operating systems or purport to
identify "UNIX" as a single operating system.
19. States that it is without information sufficient to form
a belief as to the truth of averments of paragraph 19, except denies
the "market" averments and that Windows serves as "the" link
described in the averments.
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20. States that it is without information sufficient to form a
belief as to the truth of the averments of paragraph 20, except admits
that UNIX operating systems are used by corporations.
21. States that it is without information sufficient to form a
belief as to the averments of paragraph 21.
22. States that it is without information sufficient to form a
belief as to the truth of the averments of paragraph 22, except admits
that AT&T Technologies, Inc. licensed certain software to
IBM and Sequent.
23. Denies the averments of paragraph 23 as they relate to IBM,
except admits that IBM develops, manufactures and markets a UNIX product
and states that it is without information sufficient to form a belief as
to the truth of the averments as they relate to any other person
or entity.
24. States that it is without information sufficient to form a
belief as to the truth of the averments of paragraph 24.
25. States that it is without information sufficient to form a
belief as to the truth of the averments of paragraph 25.
26. Denies the averments of paragraph 26, except admits that IBM
markets a UNIX product under the trade name "AIX".
27. Denies the averments of paragraph 27, except admits that
Sequent marketed a UNIX product under the name "DYNIX/ptx".
28. Denies the averments of paragraph 28 as they relate to IBM
or AIX, except states that IBM develops, manufactures and markets a
UNIX product under the trade
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name "AIX" and states it is without information sufficient to form
a belief as to the truth of the averments as they relate to any other
person or entity.
29. Denies the averments of paragraph 29.
30. Denies the averments of paragraph 30, except states that it is
without information sufficient to form a belief as to the truth of the
averments of the second sentence.
31. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 31, except denies the
"market" averments.
32. Denies the averments of paragraph 32.
33. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 33.
34. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 34.
35. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 35.
36. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 36, except admits that
IBM POWER chips are currently more powerful than the Intel chips
described in these averments.
37. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 37.
38. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 38.
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39. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 39.
40. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 40.
41. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 41.
42. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 42.
43. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 43.
44. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 44.
45. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 45.
46. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 46.
47. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 47.
48. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 48.
49. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 49.
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50. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 50.
51. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 51.
52. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 52, except admits that
UnixWare ran on Intel-based processors.
53. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 53.
54. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 54.
55. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 55, except admits that
IBM and The Santa Cruz Operation, Inc. (a California corporation now
known as Tarantella, Inc., which is not affiliated with SCO), entered
into an agreement to develop a UNIX operating system for a 64-bit
processing platform that was being developed by Intel and that the
project was known as Project Monterey.
56. Denies the averments of paragraph 56.
57. Denies the averments of paragraph 57 as they relate to IBM, admits
that The Santa Cruz Operation, Inc., provided information to IBM
concerning UnixWare and certain software, and states that IBM is without
information sufficient to form a belief as to the truth of the averments
as they relate to any other person or entity.
58. Denies the averments of paragraph 58.
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59. Denies the averments of paragraph 59.
60. Denies the averments of paragraph 60 as they relate to IBM,
except admits that AT&T Technologies, Inc. licensed certain operating
system software code to IBM, refers to the license agreements for
their contents and states that IBM is without information sufficient
to form a belief as to the truth of the averments of paragraph 60 as
they relate to any other person or entity.
61. Denies the averments of paragraph 61.
62. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 62.
63. Denies the averments of paragraph 63.
64. Denies the averments of paragraph 64, except refers to the
referenced documents for their contents.
65. Denies the averments of paragraph 65, except refers to the
referenced document for its contents.
66. Denies the averments of paragraph 66, except refers to the
referenced documents for their contents.
67. Denies the averments of paragraph 67, except refers to the
referenced document for its contents.
68. States that the averments of paragraph 68 purport to define
a term for purposes of SCO's complaint and do not require a response.
To the extent a response is required, IBM denies the averments of
paragraph 68, except refers to the referenced documents for their
contents.
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69. Denies the averments of paragraph 69, except refers to the
referenced documents for their contents.
70. Denies the averments of paragraph 70, except refers to the
referenced documents for their contents and states that the averments
of paragraph 70 purport to define a term for purposes of SCO's
complaint and do not require a response.
71. States that it is without information sufficient to form a
belief as to the truth of the averments of paragraph 71.
72. States that it is without information sufficient to form a
belief as to the truth of the averments of paragraph 72.
73. States that it is without information sufficient to form a
belief as to the truth of the averments of paragraph 73.
74. States that it is without information sufficient to form a
belief as to the truth of the averments of paragraph 74.
75. States that it is without information sufficient to form a
belief as to the truth of the averments of paragraph 75.
76. Denies the averments of paragraph 76, except states that it
is without information sufficient to form a belief as to the truth
of the second sentence of paragraph 76.
77. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 77.
78. Denies the averments of paragraph 78, except states that it is
without information sufficient to form a belief as to the truth of the
averments except as they relate to IBM.
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79. Denies the averments of paragraph 79.
80. Denies the averments of paragraph 80 as they relate to IBM and
states that it is without information sufficient to form a belief as to
the truth of the averments as they relate to any other person or
entity.
81. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 81.
82. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 82.
83. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 83.
84. Denies the averments of paragraph 84.
85. Denies the averments of paragraph 85.
86. Denies the averments of paragraph 86 as they relate to IBM, except
admits that IBM has increased its IBM Global Services staff and states
that it is without information sufficient to form a belief as to the
truth of the averments of paragraph 86 as they relate to any other person
or entity.
87. Denies the averments of paragraph 87.
88. Denies the averments of paragraph 88.
89. Denies the averments of paragraph 89.
90. Denies the averments of paragraph 90. except refers to the
referenced document for its contents.
91. Denies the averments of paragraph 91.
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92. Denies the averments of paragraph 92 and states that IBM has not
open sourced any part of AIX that it did not have the right to open source,
93. Denies the averments of paragraph 93.
94. Denies the averments of paragraph 94, except refers to the
referenced document for its contents.
95. Denies the averments of paragraph 95.
96. Denies the averments of paragraph 96, except refers to the
referenced document for its contents.
97. Denies the averments of paragraph 97, except refers to the
referenced document for its contents.
98. Denies the averments of paragraph 98, except states that it is
without information sufficient to form a belief as to the truth of
the averments in the second sentence of paragraph 98.
99. Denies the averments of paragraph 99.
100. Denies the averments of paragraph 100, except refers to the
referenced document for its contents.
101. Denies the averments of paragraph 101.
102. Denies the averments of paragraph 102.
FIRST CAUSE OF ACTION
103. Repeats and realleges its answers to the averments contained
in paragraphs 1 through 102 as if fully set forth herein,
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104. Denies the averments of paragraph 104, except refers to the
referenced document for its contents.
105. Denies the averments of paragraph 105, except refers to the
referenced document for its contents.
106. Denies the averments of paragraph 106.
107. Denies the averments of paragraph 107, except refers to the
referenced document for its contents.
108. Denies the averments of paragraph 108.
109. Denies the averments of paragraph 109, except refers to the
referenced document for its contents.
110. Denies the averments of paragraph 110.
111. Denies the averments of paragraph 111.
112. Denies the averments of paragraph 112, except refers to the
referenced documents for their contents.
113. Denies the averments of paragraph 113 as they relate to IBM,
refers to the referenced document for its contents and states that IBM
is without information sufficient to form a belief as to the truth of
the averments as they relate to any other person or entity.
114. Denies the averments of paragraph 114.
115. Denies the averments of paragraph 115.
116. Denies the averments of paragraph 116, except refers to the
referenced document and regulations for their contents.
117. Denies the averments of paragraph 117.
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118. Denies the averments of paragraph 118, except refers to the
referenced documents for their contents.
119. Denies the averments of paragraph 119, except refers to the
referenced document for its contents.
120. Denies the averments of paragraph 120.
121. Denies the averments of paragraph 121.
122. Denies the averments of paragraph 122, except refers to the
referenced document for its contents, and admits that IBM lawfully
uses certain software products and source code,
123. Denies the averments of paragraph 123.
124. Denies the averments of paragraph 124.
125. Denies the averments of paragraph 125.
126. Denies the averments of paragraph 126.
SECOND CAUSE OF ACTION
127. Repeats and realleges its answers to the averments contained
in paragraphs 1 through 126 as if fully set forth herein.
128. Denies the averments of paragraph 128. except refers to the
referenced document for its contents.
129. Denies the averments of paragraph 129.
130. Denies the averments of paragraph 130.
131. Denies the averments of paragraph 131.
132. Denies the averments of paragraph 132.
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THIRD CAUSE OF ACTION
133. Repeats and realleges its answers to the averments contained
in paragraphs 1 through 132 as if fully set forth herein.
134. Denies the averments of paragraph 134, except refers to the
referenced document for its contents.
135. Denies the averments of paragraph 135, except refers to the
referenced document for its contents.
136. Denies the averments of paragraph 136.
137. Denies the averments of paragraph 137, except refers to the
referenced document for its contents.
138. Denies the averments of paragraph 138.
139. Denies the averments of paragraph 139, except refers to the
referenced code and documentation for their contents.
140. Denies the averments of paragraph 140.
141. Denies the averments of paragraph 141, except refers to the
referenced document for its contents.
142. Denies the averments of paragraph 142.
143. Denies the averments of paragraph 143, except refers to the
referenced document for its contents.
144. Denies the averments of paragraph 144.
145. Denies the averments of paragraph 145, except refers to the
referenced document for its contents, states that these averments
purport to characterize the laws of the
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United States and do not require a response and admits that IBM is
subject to the laws of the United States and refers to those laws
for their contents.
146. Denies the averments of paragraph 146.
FOURTH CAUSE OF ACTION
147. Repeats and realleges its answers to the averments contained in
paragraphs 1 through 146 as if fully set forth herein.
148. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 148.
149. Denies the averments of paragraph 149.
150. Denies the averments of paragraph 150.
151. Denies the averments of paragraph 151.
152. Denies the averments of paragraph 152.
153. Denies the averments of paragraph 153.
FIFTH CAUSE OF ACTION
154. Repeats and realleges its answers to the averments contained in
paragraphs 1 through 153 as if fully set forth herein.
155. States that it is without information sufficient to form a belief
as to the truth of the averments of paragraph 155.
156. Denies the averments of paragraph 156.
157. Denies the averments of paragraph 157.
158. Denies the averments of paragraph 158,
159. Denies the averments of paragraph 159.
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SIXTH CAUSE OF ACTION
160. Repeats and realleges its answers to the averments contained
in paragraphs 1 through 159 as if fully set forth herein.
161. Denies the averments of paragraph 161.
162. Denies the averments of paragraph 162.
163. States that it is without information sufficient to form a
belief as to the truth of the averments of paragraph 163.
164. Denies the averments of paragraph 164.
165. Denies the averments of paragraph 165.
166. Denies the averments of paragraph 166.
167. Denies the averments of paragraph 167.
168. Denies the averments of paragraph 168.
169. Denies the averments of paragraph 169.
170. Denies the averments of paragraph 170.
PRAYER FOR RELIEF
States that the enumerated paragraphs 1-12, following SCO's prayer
for relief, contain a request for relief as to which no response is
required. To the extent a response is required, IBM denies that SCO is
entitled to the requested relief.
GENERAL DENIAL
IBM denies each averment in the complaint that is not specifically
admitted herein.
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AFFIRMATIVE DEFENSES
First Defense
The complaint fails to state a claim upon which relief can be
granted.
Second Defense
SCO's claims are barred because IBM has not engaged in any unlawful
or unfair business practices, and IBM's conduct was privileged, performed
in the exercise of an absolute right, proper and/or justified.
Third Defense
SCO lacks standing to pursue its claims against IBM.
Fourth Defense
SCO's claims are barred, in whole or in part, by the applicable
statutes of limitations.
Fifth Defense
SCO's claims are barred, in whole or in part, by the economic-loss
doctrine or the independent-duty doctrine.
Sixth Defense
SCO's claims are barred by the doctrines of laches and delay.
Seventh Defense
SCO's claims are barred by the doctrines of waiver, estoppel and
unclean hands.
Eighth Defense
SCO's claims are, in whole or in part, pre-empted by federal law.
Ninth Defense
SCO's claims are improperly venued in this district.
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Tenth Defense
SCO has failed, in whole or in part, to mitigate its alleged damages.
WHEREFORE, defendant IBM prays that this Court enter judgement in favor
of IBM and against SCO, dismissing the amended complaint with prejudice
and granting such other and further relief as the Court deems just and
proper, including costs, disbursements and attorneys' fees.
COUNTERCLAIMS
For its counterclaims herein, counterclaim-plaintiff International
Business Machines Corporation ("IBM"), by and through its attorneys,
upon personal knowledge as to its own actions and upon information and
belief as to the actions of counterclaim-defendant The SCO Group, Inc.
("SCO"), avers as follows:
NATURE OF COUNTERCLAIMS
1. These counterclaims arise from SCO's efforts wrongly to assert
proprietary rights over important, widely-used technology and to impede
the use of that technology by the open-source community. SCO has misused,
and is misusing, its purported rights to the UNIX operating system
developed originally by Bell Laboratories, then a research and development
arm of AT&T Corp., to threaten destruction of the competing operating
systems known as AIX and Linux, and to extract windfall profits for its
unjust enrichment.
2. IBM's counterclaims also arise from SCO's infringement of
IBM patents. Although SCO purports to respect the intellectual property
rights of others -- and has instituted
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litigation against IBM for alleged failures with respect to SCO's
purported rights -- SCO itself is infringing no fewer than four IBM
patents.
JURISDICTION AND VENUE
3. This Court has jurisdiction over IBM's counterclaims pursuant to 28
U.S.C. §§ 1331,1332(a)(l), 1338(a) and 1367 and 15 U.S.C. § ll25(a)(l).
4. The Court has diversity and supplemental jurisdiction over IBM's
state law claims. The parties have complete diversity of citizenship,
and the amount in controversy exceeds $75,000 exclusive of interest
and costs. IBM's Lanham Act claim and its patent claims arise under
federal law.
5. Venue is proper in this district, with respect to IBM's counterclaims,
pursuant to 28 U.S.C. §§ l391(b), 139l(c), and 1400(b).
PARTIES
6. Counterclaim-plaintiff IBM is a New York corporation with its
principal place of business in the state of New York.
7. Counterclaim-defendant SCO is a Delaware corporation with its
principal place of business in Utah County, Utah.
BACKGROUND
A. UNIX, IBM and AIX
8. Beginning in the mid-1980s, IBM acquired broad rights to use UNIX
software pursuant to a series of agreements with AT&T Technologies, Inc.
These agreements, referred to as the "AT&T Agreements", include the
Software Agreement (Agreement Number SOFT-00015) dated February 1, 1985,
the Sublicensing Agreement (Agreement Number
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SUB-00015A) dated February 1, 1985, the Substitution Agreement (Agreement
Number XPER-00015B) dated February 1, 1985, the letter agreement dated
February 1, 1985, and the Software Agreement Supplement 170, as amended
by a letter agreement dated on or about January 25, 1989. Copies of
these agreements are attached hereto as Exhibits A through F, respectively.
9. In connection with the proper exercise of these and other rights
previously obtained by IBM with respect to UNIX, IBM began development
of its own version of a UNIX operating system, called AIX. Over the last
two decades, IBM has expended tremendous resources on developing AIX,
creating millions of lines of original code, incorporating it into its
product lines and licensing the technology to thousands of customers
worldwide. IBM continues to do so today.
10. In 1993, Novell, Inc. ("Novell") acquired AT&T Technologies,
Inc.'s rights under the AT&T Agreements. In 1995, Novell assigned
certain (but not all) of these rights to The Santa Cruz Operation, Inc.
("Original SCO"), a California corporation now known as Tarantella, Inc.,
which is not affiliated with SCO.
11. Thereafter, IBM obtained additional rights with respect to UNIX
software. Pursuant to an agreement known as Amendment X, entered into
by IBM, Novell and Original SCO on October 17, 1996, for example, IBM
acquired the "irrevocable, fully paid-up, perpetual right to exercise
all of its rights" under the AT&T Agreements. A copy of this amendment
is attached hereto as Exhibit G.
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B. SCO, Linux and the GPL
12. In 1994, SCO was formed under the name "Caldera, Inc."
SCO began its business as a developer and distributor of the Linux
operating system.
13. Linux is an "open-source" operating system, the development of
which was begun by Linus Torvalds in 1991. Since then, Linux has evolved
through a rapid collaborative process resembling that of scientific
peer review. There is a large, worldwide community of programmers who
routinely read, redistribute and modify Linux source code in order to
improve it.
14. Since its inception, SCO has distributed a number of Linux products,
including SCO Linux Server, SCO OpenLinux Server, SCO OpenLinux Workstation,
and Caldera OpenLinux. SCO also distributed SCO Manager, a proprietary
webbed systems administration tool for managing Linux and UNIX systems.
Although SCO purported to suspend its Linux distribution at the commencement
of this action, SCO has continued to make Linux source code available for
download through its website.
15. SCO has distributed its Linux products under the GNU General Public
License (the "GPL"), a copy of which is attached hereto as Exhibit H.
The GPL is intended to guarantee "freedom to share and change free
software -- to make sure the software is free for all its users".
Linux is subject to the GPL because it is comprised of programs and other
works that contain notices placed by contributing copyright holders saying
that they may be distributed under the terms of the GPL. The Linux
developers' public agreement to apply GPL terms expresses in a binding legal
form the conscious public covenant that defines the open-source community
-- a covenant that SCO itself supported as a Linux company for eight years.
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16. SCO accepted the terms of the GPL by modifying and distributing
Linux products. By distributing Linux products under the GPL, SCO agreed,
among other things, not to assert -- indeed, it is prohibited from asserting
-- certain proprietary rights (such as the right to collect license fees)
over any source code distributed under the terms of the GPL. SCO also
agreed not to restrict further distribution of any source code distributed
by SCO under the terms of the GPL.
C. IBM and Linux
17. IBM is a participant in the open-source movement and has made a
substantial investment in Linux business efforts over the last 5 years.
IBM participates in a broad range of Linux projects that are important to
the company and contribute to the open-source community.
18. Today, IBM has a full line of products that run Linux and Linux
services: mainframes and servers that run Linux; memory solutions for
Linux environments; a broad range of software offerings; services that
include deployment of Linux-based e-business environments, migration of
database applications and data to Linux systems, support for Linux-based
cluster computing, server consolidation, and a 24-hour technical
engineering support line. IBM has created a Linux Center of Competency
that offers Linux training and support, applications testing, technical
advice and a hands-on environment in which to evaluate Linux and Linux-based
applications.
19. Like thousands of other developers, IBM has properly contributed
source code to Linux under the GPL. In fact, SCO has included IBM
contributions to Linux in the Linux products that SCO has distributed
under the GPL. Like all recipients of SCO's Linux
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distributions, IBM is entitled to the protections of the GPL with respect
to the IBM contributions (as well as any other contributions) included
in SCO's Linux distributions.
D. Failure of SCO's Business
20. Although it completed an initial public offering, SCO has failed
to establish a successful business around Linux. SCO's Linux business
has never generated a profit. In fact, the company as a whole did not
experience a profitable quarter until after it abandoned its Linux business
and undertook its present scheme to extract windfall profits from UNIX
technology that SCO played no role in developing.
21. In an attempt to revive its faltering Linux business, SCO
acquired Original SCO's rights to UNIX and undertook "the unification
of the UNIX and Linux operating systems". To that end, SCO markets and
sells a number of UNIX products, including UnixWare, SCO OpenServer,
Reliant HA, and Merge. Like SCO's Linux business, however, this enterprise
is failing. With apparently no other prospects. SCO shifted its business
model to litigation.
E. SCO's Scheme
22. SCO devised a scheme to profit from the UNIX rights that it
acquired from Original SCO, though UNIX was in no way developed by SCO.
Although most, if not all, of the UNIX technology that SCO purports to
own is generally known, available without restriction to the general public
or readily ascertainable by proper means, SCO undertook to create fear,
uncertainty and doubt in the marketplace in regard to SCO's rights in and
to that technology.
23. Recognizing that there is little value in its UNIX rights, SCO
did not limit its scheme to that technology, rather, SCO devised and
executed a plan to create the false
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perception that SCO holds rights to UNIX that permit it to control not
only all UNIX technology, but also Linux -- including those aspects
generated through the independent hard work and creativity of thousands
of other developers and long distributed by SCO itself under the GPL.
24. SCO undertook to carry out its scheme by, among other things,
(a) bringing baseless legal claims against IBM and threatening to sue
other companies and individuals, (b) conducting a far-reaching publicity
campaign to create the false and/or unsubstantiated impression that SCO
has rights to UNIX and Linux that it does not have and that IBM and others
have violated SCO's rights and (c) otherwise seeking to condition the
market to believe that SCO has rights to UNIX and Linux that it does not
have and cannot properly enforce
F. SCO's Lawsuit and Threats
25. On March 7, 2003, without any prior notice or warning that
would have allowed IBM to understand SCO's claims and respond to them, SCO
sued IBM alleging a host of meritless claims, in particular, SCO alleges
that IBM has breached its contractual obligations to SCO by, among other
things, incorporating and inducing others to incorporate SCO's intellectual
property into Linux. In addition, SCO alleges that IBM has competed unfairly,
interfered with SCO's contracts with others, and misappropriated SCO's trade
secrets.
26. By its complaint, and the amended complaint it submitted on July 22,
2003, SCO asserts legal theories that are frivolous, such as that SCO has
ownership rights with respect to all of the code in AIX. In addition, SCO
also seeks relief to which it is plainly not entitled, such as a permanent
injunction terminating IBM's ability to possess and use the
---- page ----
software products it licensed from AT&T Technologies. Inc., notwithstanding
the fact that those rights are expressly "irrevocable" and "perpetual".
27. In addition to instituting litigation against IBM, SCO sent letters to
1500 of the world's largest corporations threatening litigation. In its
letters, an example of which is attached hereto as Exhibit I. SCO states,
"We believe that Linux infringes on our UNIX intellectual property and other
rights". SCO further states, "We intend to aggressively protect and enforce
these rights" against not only the companies involved with "the Linux
development process" but also "the end user" companies using any Linux
technology. SCO has made clear that it intends to bring legal action relating
to Linux. For example, in a press conference on July 21, 2003, SCO stated
that taking out a license with SCO was the "alternative to legal enforcement
against Linux end-users".
G. SCO's Campaign of False Publicity
28. Following the commencement of its lawsuit against IBM and its
barrage of letters threatening suit against others, SCO continued its
campaign of falsehoods by further misrepresenting to the market the
interplay of UNIX, AIX and Linux and SCO's and IBM's rights to these
products.
29. SCO has repeatedly made false public statements to the effect that
it has the right and authority to revoke, and has effectively revoked
IBM's right to use AIX, IBM's version of UNIX. For example, on May 12,
2003, Chris Sontag, a Senior Vice President of SCO, stated publicly,
SCO has "the right to revoke the AIX license", and on June 16, 2003,
SCO announced publicly that it had "terminated IBM's right to use or
distribute any software product that is a modification of or based on
UNIX System V source code". Indeed, in an interview
---- page ----
given by SCO CEO Darl McBride to Peter Williams of vnunet.com on June 25,
2003, SCO falsely represented that its contractual rights to "pull"
IBM's contract are "bullet-proof".
30. By way of further example, SCO has falsely stated that it has the
right to control the use by IBM of all of UNIX and AIX technology and to
control the use by all persons and entities of Linux technology, which
SCO contends is an illegal derivative of UNIX. On June 16, 2003, SCO
announced in a press release that "AIX is an unauthorized derivative
of the UNIX System operating system source code and its users are, as of
this date, using AIX without a valid basis to do so". A SCO letter to Linux
users, dated May 12, 2003, states, "We believe that Linux is, in material
part, an unauthorized derivative of UNIX.... We believe that Linux infringes
on our UNIX intellectual property and other rights."
31. SCO's campaign has not been limited to press releases and public
interviews. SCO has also propagated falsehoods about its and IBM's rights
in non-public meetings with analysts. SCO has solicited and participated
in these meetings to misuse analysts to achieve wider dissemination of SCO's
misleading message about UNIX, AIX and Linux and to damage IBM and the
open-source movement. In a luncheon hosted by Deutsche Bank analyst
Brian Skiba, on or about July 22, 2003, for example, SCO falsely stated
that IBM transferred the NUMA code from Sequent to Linux without any legal
basis to do so and that IBM's actions were giving rise to about $1 billion
in damages per week. In an interview in June 2003 with Client Server News,
SCO misrepresented to analysts that IBM has improperly released "truckloads"
of code into the open-source community.
---- page ----
H. Novell's Exercise of Rights
32. On June 9, 2003, in response to SCO's actions, and pursuant to
its obligations under Amendment X, Novell stated its belief that SCO has
no right to terminate IBM's UNIX License which is perpetual and irrevocable,
and Novell exercised its retained rights to UNIX to put a stop to SCO's
misconduct. Under Section 4.16(b) of the Asset Purchase Agreement between
Novell and Original SCO dated September 19, 1995 ("APA"), attached hereto
as Exhibit J, Novell directed SCO to "waive any purported right SCO may
claim to terminate IBM's [UNIX] licenses enumerated in Amendment X or to
revoke any rights thereunder, including any purported rights to terminate
asserted in SCO's letter of March 6, 2003 to IBM". A copy of Novell's
June 9, 2003 letter is attached hereto as Exhibit K.
33. When SCO failed to take the actions directed by Novell, on June 12,
2003, Novell exercised its rights under Section 4.16(b) of the APA to waive
and revoke, in SCO's stead, any purported right SCO claimed to terminate
IBM's licenses. A copy of Novell's June 12, 2003 letter is attached hereto
as Exhibit L.
34. Notwithstanding the fact that IBM's rights to UNIX are expressly
"irrevocable" and "perpetual" under Amendment X and the fact that Novell
has exercised its right to waive, in any event, any contractual rights SCO
claims IBM violated, SCO nevertheless purported to terminate IBM's licenses
on June 13, 2003. Moreover, even assuming (contrary to fact) that IBM's
rights were terminable, at no time prior to SCO's purported termination did
SCO comply with its obligations under the AT&T Agreements to identify the
specific acts or omissions that SCO alleges constitute IBM's breach,
despite IBM's demands that SCO do so.
---- page ----
35. Rather, SCO has continued to misrepresent that it can, or will, or
has in fact revoked IBM's right to use UNIX, without disclosing that IBM's
rights to UNIX are not terminable or that Novell has exercised its right to
waive any contractual rights SCO claims IBM violated. In an interview with
InformationWeek on or about June 12, 2003, for instance, SCO falsely stated
that it has the right to revoke IBM's license and order the destruction of
every copy of AIX.
I. SCO's Refusal to Specify Its Claims
36. Rather than particularize its allegations of misconduct by IBM and
others, SCO has obfuscated and altered its claims to foster fear, uncertainty
and doubt about its rights and the rights of others. In letters dated April 2,
2003, and May 5, 2003, attached hereto as Exhibits M and N, respectively,
IBM expressly asked SCO to advise IBM as to what SCO contends IBM has done
in violation of any of its agreements, and what SCO contends IBM should do
to cure such violations. SCO refused. In fact, SCO's counsel stated, in an
interview with Maureen O'Gara of LinuxGram, that it "doesn't want IBM to
know what they [SCO's substantive claims] are".
37. SCO has obfuscated its claims and has hidden its supposed evidence
because the evidence does not demonstrate the breaches and violations that
SCO has alleged. Moreover, key developers and influential leaders in the
open-source community, including leaders of Linux kernel development, have
stated publicly that they are prepared immediately to remove any allegedly
offending material from the Linux kernel. Rather than permit remediation or
mitigation of its alleged injuries (which are non-existent), SCO has declined
to reveal the
---- page ----
particulars of the alleged violations in order to artificially and improperly
inflate the price of its stock.
38. While refusing to supply IBM with meaningful specifics regarding the
alleged breaches, SCO has shown its purported evidence to analysts and
journalists who are interested in seeing it, subject to a nondisclosure
agreement.
J. SCO's Disparagement of AIX and Linux.
39. In addition to purporting to terminate IBM's rights to use AIX, SCO
has disparaged AIX as "unauthorized". In a press release dated June 16,
2003, SCO's counsel stated that "SCO has the right to terminate IBM's right
to use and distribute AIX. Today AIX is an "unauthorized derivative of the
UNIX operating system source code and its users are, as of this date, using
AIX without a valid license to do so", in the same press release, Darl
McBride, SCO's Chief Executive Officer, stated that "IBM no longer has the
authority to sell or distribute AIX and customers no longer have the right
to use AIX software".
40. Here again, SCO's false and misleading statements have not been
limited to AIX. In recognition of the fact that its claims against IBM are
baseless, and in flat contradiction of the allegation of its original
complaint (e.g., that this case is not about the relative merits of
proprietary versus open-source software), SCO has now falsely stated, in
effect, it owns and is entitled to collect royalties regarding Linux. For
example, on July 21, 2003, McBride stated, on behalf of SCO, Linux infringes
SCO's rights and as "a viable alternative to legal enforcement" SCO is
prepared to offer a license to SCO's UNIX products that would, SCO says,
permit lawful use of Linux.
---- page ----
41. SCO's false and misleading statements have also damaged the
reputation and prospects of the entire open-source community, SCO's
misconduct undermines the substantial public interest in the provision
of software that is reliable, inexpensive, and accessible by the general public.
K. SCO's Infringement
42. Notwithstanding its allegations that IBM and others have breached
SCO's intellectual property rights, SCO is engaged in pervasive acts of
infringement of no fewer than four of IBM's patents, attached hereto as
Exhibits 0 through R, by making, using, selling and/or offering to sell a
variety of products, including: "UnixWare", a UNIX operating system for
Intel and AMD processor-based computer systems; "Open Server", an operating
system platform; "SCO Manager", a web-based remote systems management
solution for management of Linux and SCO UNIX systems; and "Reliant HA",
"clustering" software that permits interconnection of multiple servers to
achieve redundancy.
L: Effects of SCO's Misconduct and Its State of Mind
43. As a result of the misconduct described above, SCO has not only
artificially inflated its stock price and been unjustly enriched, but also
it has injured IBM and, more broadly, the open-source movement. SCO's
misconduct has resulted in damage to IBM's business, including its reputation
and goodwill, has interfered with its prospective economic relations and
has required it unduly to divert resources to respond to SCO's baseless
allegations. SCO has injured the open-source movement, of which it was
once a part, by fostering fear, uncertainty and doubt about its and others'
rights to use UNIX, AIX and Linux.
---- page ----
44. SCO's misconduct is especially egregious because SCO has implemented
its scheme with actual knowledge or in reckless disregard of the fact that
it does not have the rights that it seeks to assert (e.g. the right to
terminate IBM's irrevocable and perpetual UNIX rights). Moreover, SCO
committed not to assert certain proprietary rights over or to restrict
further distribution of any source code distributed by SCO under the terms
of the GPL.
FIRST COUNTERCLAIM
Breach of Contract
45. IBM repeats and realleges the averments in paragraphs 1 through 44,
with the same force and effect as though they were set forth fully herein.
46. SCO is licensor and IBM licensee of the right to use and sublicense
the UNIX software, as specified in the AT&T Agreements and Amendment X,
all of which are valid contracts.
47. IBM has performed all its duties and obligations under the AT&T
Agreements and Amendment X.
48. SCO has breached its express duties and obligations under the AT&T
Agreements and Amendment X by, among other filings, purporting to terminate
IBM's irrevocable and perpetual UNIX rights and/or refusing to provide IBM
adequate notice and opportunity to cure its alleged misconduct.
49. SCO has also breached the implied covenant of good faith and fair
dealing under the AT&T Agreements and Amendment X by affirmatively seeking
to deprive IBM of the benefits to which it is entitled under those contracts
through numerous acts of bad faith,
---- page ----
including, among other things, making false and misleading statements to
the public about SCO's and IBM's rights under the same.
50. IBM has suffered damages from SCO's breaches of contract in an
amount to be determined at trial.
SECOND COUNTERCLAIM
Lanham Act Violation
51. IBM repeats and realleges the averments in paragraphs 1 through 50,
with the same force and effect as though they were set forth fully herein.
52. IBM sells and distributes AIX and Linux-related products and services
in interstate commerce.
53. SCO has made material false representations regarding AIX and IBM's
Linux-related products and services, which affect a customer's decision
whether to purchase these products and services. Specifically, SCO has
publicly misrepresented the legitimacy of these products and services by
falsely representing that IBM no longer has the right, authority and
license to use, produce and distribute these products and by misrepresenting
SCO's own rights in and to UNIX, AIX and Linux.
54. SCO has published its false statements in a series of
widely-distributed press releases, press interviews and other streams of
commerce, as part of its bad faith campaign to discredit IBM's products
and services in the marketplace, to increase the perceived value of SCO's
limited rights to UNIX and to promote SCO's own UNIX operating systems,
UnixWare and Open Server.
---- page ----
55. These statements are likely to cause confusion and mistake and
have in fact caused confusion and mistake as to the characteristics of
IBM's goods, products and/or services.
56. As a direct result of SCO's false representations, all of which are
in violation of 15 U.S.C. § 1125, IBM has suffered damages in an amount
to be determined at trial. IBM is also entitled to damages and attorneys'
fees pursuant to 15 U.S.C. § 1H7(a).
THIRD COUNTERCLAIM
Unfair Competition
57. IBM repeats and realleges the averments in paragraphs 1 through 56,
with the same force and effect as though they were set forth fully herein.
58. IBM has invested over two decades and hundreds of millions of dollars
in the creation and development of AIX. Through IBM's efforts, innovation
and hard work, AIX has become one of the leading UNIX operating systems,
and IBM's products and services are sold and used throughout the United
States. Similarly, IBM has invested substantial time and effort in developing
its Linux-related products and services.
59. SCO has intentionally, knowingly, wrongfully and in bad faith engaged
in a public pattern of conduct aimed at depriving IBM of the value of its
AIX and Linux-related products and services and misappropriating the same
for the benefit of SCO's UNIX licensing business as well as SCO's competing
UNIX operating systems. SCO's misconduct is likely to result in confusion
in the marketplace and has in fact resulted in confusion concerning
AIX and Linux.
---- page ----
60. SCO has engaged in unfair competition by falsely claiming ownership
of IBM's intellectual property as well as the intellectual property created
by the open-source community; publishing false and disparaging statements
about AIX; making bad faith misrepresentations concerning IBM's rights to
UNIX and AIX; misusing and misrepresenting SCO's limited rights in UNIX to
injure IBM; and falsely accusing IBM of theft of SCO's intellectual property.
61. As a direct result of SCO's unfair competition, IBM has and will
continue to suffer damage to its reputation, goodwill, and business in an
amount to be determined at trial. Because SCO's acts of unfair competition
were and are willful and malicious, IBM is also entitled to punitive damages.
FOURTH COUNTERCLAIM
Intentional Interference with Prospective Economic Relations
62. IBM repeats and realleges the averments in paragraphs 1 through 61,
with the same force and effect as though they were set forth fully herein.
63. IBM is actively engaged in the development, manufacture and sale of
AIX and products and services relating to Linux. IBM has prospective business
relationships with numerous companies and individuals to whom IBM seeks to
sell and/or license these products and services. IBM also has prospective
business relationships with business and individual members of the Linux
and open-source software development, distribution, service and computing
communities with whom IBM seeks to do business in various capacities,
including through research and development efforts.
---- page ----
64. SCO is fully aware of these prospective business relationships and
the importance of the relationships to IBM's continued commercial success.
65. SCO has intentionally interfered with these relationships through
improper means, including by making false and misleading statements to
IBM's prospective customers that IBM no longer has the right, authority
and license to use, produce and distribute AIX and Linux-related products.
SCO has also misrepresented its own rights relating to these operating
systems. The purpose of SCO's unlawful conduct is to injure IBM by
driving prospective customers of AIX and IBM's Linux-related products
and services away from purchasing and licensing the same from IBM,
66. Furthermore, SCO has intentionally interfered with IBM's valuable
economic relationships with business and individual members of the Linux
and open-source software communities by falsely and publicly accusing IBM
of inserting "truckloads" of SCO's intellectual property into the Linux
kernel and related software. Again, the purpose of SCO's unlawful conduct
is to injure IBM by driving away these businesses and individuals from
future open-source collaborations with IBM.
67. IBM has suffered damages from SCO's tortious interference with its
economic relations in an amount to be determined at trial. Because SCO's
tortious interference with IBM's prospective economic relations was and
is willful and malicious, IBM is entitled to punitive damages.
---- page ----
FIFTH COUNTERCLAIM
Unfair and Deceptive Trade Practices
68. IBM repeats and realleges the averments in paragraphs 1 through 67,
with the same force and effect as though they were set forth fully herein.
69. SCO has engaged in unfair and deceptive trade practices by, among
other things, falsely representing that IBM no longer has the right, authority
and/or license to use, produce and/or distribute AIX and Linux-related
products; misrepresenting SCO's and IBM's rights relating to these
operating systems; and publishing false and disparaging statements about
AIX and Linux.
70. SCO's false statements and misrepresentations were made in
connection with SCO's solicitation of business, and in order to induce IBM
and others to purchase products and licenses from SCO. SCO's statements and
misrepresentations are likely to cause confusion and misunderstanding as
to the qualities, benefits and characteristics of AIX and Linux. SCO has
misrepresented that these products have qualities, benefits and
characteristics that they do not have.
71. SCO's misconduct was undertaken for the purpose of deceiving the
marketplace and defaming IBM and has deceived and misled the public and
IBM's customers; disparaged the goods, services, and business of IBM;
and otherwise injured IBM's business in violation of N.Y. Gen. Bus.
Law § 349 and the laws of other states.
72. IBM has provided SCO with notice of its false and misleading
statements, and has given SCO an opportunity to correct those statements.
SCO has refused and has instead opted to make more false and misleading
statements.
---- page ----
73. As a direct result of SCO's unfair and deceptive trade practices,
the public at large, including AIX and Linux users, has been harmed by
SCO's campaign to foster fear, uncertainty and doubt about AIX and Linux.
Moreover, IBM has suffered damages in an amount to be determined at trial.
Because SCO's acts of unfair and deceptive trade practices were and are
willful, knowing and malicious, IBM is also entitled to treble damages
and/or fees pursuant to N.Y. Gen. Bus. Law § 349(h).
SIXTH COUNTERCLAIM
Breach of the GNU General Public License
74. IBM repeats and realleges the averments in paragraphs 1 through 73,
with the same force and effect as though they were set forth fully herein.
75. IBM has made contributions of source code to Linux under the GPL on
the condition that users and distributors of such code, including SCO,
abide by the terms of the GPL in modifying and distributing Linux products,
including, for example, the requirement that they distribute all versions
of GPL'd software (original or derivative) under the GPL and only the GPL
pursuant to § 2(b) of the GPL.
76. SCO has taken source code made available by IBM under the GPL,
included that code in SCO's Linux products, and distributed significant
portions of those products under the GPL. By so doing, SCO accepted the
terms of the GPL (pursuant to GPL § 5), both with respect to source code
made available by IBM under the GPL and with respect to SCO's own Linux
distributions.
77. The GPL prohibits SCO from asserting certain proprietary rights
(such as the right to collect license fees) over, or attempting to
restrict further distribution of any source
---- page ----
code distributed by SCO under the terms of the GPL. Based on the misconduct
described herein, SCO's rights to distribute the copyrighted works of
others included in Linux under the GPL have been terminated pursuant to
§ 4 of the GPL.
78. SCO has breached the GPL by, among other things, (1) claiming
ownership rights over Linux code, including IBM contributions; (2) seeking
to collect and collecting license fees with respect to Linux code, including
IBM contributions; (3) copying, modifying, sublicensing or distributing
Linux, including IBM contributions, on terms other than those set out in
the GPL and after its rights under the GPL terminated; and (4) seeking to
impose additional restrictions on the recipients of Linux code, including
IBM contributions, distributed by SCO.
79. As a result of SCO's breaches of the GPL, countless developers and
users of Linux, including IBM, have suffered and will continue to suffer
damages and other irreparable injury. IBM is entitled to an award of damages
in an amount to be determined at trial and to an injunction prohibiting
SCO from its continuing and threatened breaches of the GPL.
SEVENTH COUNTERCLAIM
Patent Infringement
80. IBM repeats and realleges the averments in paragraphs 1 through 79,
with the same force and effect as though they were set forth fully herein.
81. IBM is the lawful owner, by assignment, of the entire right, title
and interest in United States Patent No. 4,814,746 ("the '746 Patent"),
duly and legally issued on March 21, 1989 to Miller et al., entitled
"Data Compression Method".
---- page ----
82. Upon information and belief, SCO has been and is infringing the
'746 Patent within this judicial district and elsewhere by making,
using, selling and/or offering to sell products, including UnixWare and
Open Server, that practice one or more claims of the '746 Patent and
therefore infringe that patent to the extent such infringing acts have
occurred or occur during the effective period of that patent.
83. Upon information and belief, SCO will continue to infringe the '746
Patent unless enjoined by this Court.
84. IBM has been damaged by SCO's infringement of the '746 Patent
and has been irreparably harmed by that infringement, and will
suffer additional damages and irrevocable harm unless this
Court enjoins SCO from further infringement.
85. Continued manufacture, use, sale or offer for sale of the infringing
products, including UnixWare and Open Server, or evidence that SCO was
aware of the '746 Patent, shall render SCO liable for willful infringement,
as well as active inducement of infringement of the '746 Patent, making
this an exceptional case and justifying the assessment of treble damages
pursuant to 35 U.S.C. § 284, and the award of attorneys' fees pursuant to
35 U.S.C. § 285.
EIGHTH COUNTERCLAIM
Patent Infringement
86. IBM repeats and realleges the averments in paragraphs 1 through 85,
with the same force and effect as though they were set forth fully
herein.
87. IBM is the lawful owner, by assignment, of the entire right,
title and interest in United States Patent No. 4,821,211 ("the '211 Patent"),
duly and legally issued on
---- page ----
April 11, 1989 to Torres, entitled "Method of Navigating Among Program
Menus Using a Graphical Menu Tree".
88. Upon information and belief, SCO has been and is infringing the
'211 Patent within this judicial district and elsewhere by making,
using, selling, and/or offering to sell products, including SCO Manager,
that practice one or more claims of the '211 Patent and therefore
infringe that patent to the extent such infringing acts have occurred or
occur during the effective period of that patent.
89. Upon Information and belief, SCO will continue to infringe the '211
Patent unless enjoined by this Court.
90. IBM has been damaged by SCO's infringement of the '211 Patent,
has been irreparably harmed by that infringement, and will suffer additional
damages and irrevocable harm unless this Court enjoins SCO from further
infringement.
91. Continued manufacture, use, sale, or offer for sale of the infringing
products, including SCO Manager, or evidence that SCO was aware of the '211
Patent, shall render SCO liable for willful infringement, as well as active
inducement of infringement of the '211 Patent, making this an exceptional
case and justifying the assessment of treble damages pursuant to
35 U.S.C. § 284, and the award of attorneys' fees pursuant to 35
U.S.C. § 285.
NINTH COUNTERCLAIM
Patent Infringement
92. IBM repeats and realleges the averments in paragraphs 1 through 91,
with the same force and effect as though they were set forth fully herein.
---- page ----
93. IBM is the lawful owner, by assignment, of the entire right, title
and interest in United States Patent No. 4,953,209 ("the '209 Patent"),
duly and legally issued on August 28, 1990 to Ryder et al., entitled
"Self-Verifying Receipt and Acceptance System for Electronically Delivered
Data Objects".
94. Upon information and belief, SCO has been and is infringing the '209
Patent within this judicial district and elsewhere by making, using, selling
and/or offering to sell products, including UnixWare, that practice one or
more claims of the '209 Patent and therefore infringe that patent to the
extent such infringing acts have occurred or occur during the effective
period of that patent.
95. Upon information and belief, SCO will continue to infringe the '209
Patent unless enjoined by this Court.
96. IBM has been damaged by SCO's infringement of the '209 Patent, has
been irreparably harmed by that infringement, and will suffer additional
damages and irrevocable harm unless this Court enjoins SCO from further
infringement.
97. Continued manufacture, use, sale or offer for sale of the infringing
products, including UnixWare, or evidence that SCO was aware of the '209
Patent, shall render SCO liable for willful infringement, as well as active
inducement of infringement of the '209 Patent, making this an exceptional
case and justifying the assessment of treble damages pursuant to
35 U.S.C. § 284, and the award of attorneys' fees pursuant to
35 U.S.C. § 285.
---- page ----
TENTH COUNTERCLAIM
Patent infringement
98. IBM repeats and realleges the averments in paragraphs 1 through 97,
with the same force and effect as though they were set forth fully
herein.
99. IBM is the lawful owner, by assignment, of the entire right,
title and interest in United States Patent No, 5,805,785 ("the '785 Patent"),
duly and legally issued on September 8, 1998 to Dias et al., entitled
"Method for Monitoring and Recovery of Subsystems in a Distributed/Clustered
System".
100. Upon information and belief, SCO has been and is infringing the
'785 Patent within this judicial district and elsewhere by making, using,
selling and/or offering to sell products, including Reliant HA, that
practice one or more claims of the '785 Patent and therefore infringe
that patent to the extent such infringing acts have occurred or occur
during the effective period of that patent.
101. Upon information and belief, SCO will continue to infringe the
'785 Patent unless enjoined by this Court.
102. IBM has been damaged by SCO's infringement of the '785 Patent,
has been irreparably harmed by that infringement, and will suffer
additional damages and irrevocable harm unless this Court enjoins SCO
from further infringement.
103. Continued manufacture, use, sale or offer for sale of the
infringing products, including Reliant HA, or evidence that SCO was
aware of the '785 Patent, shall render SCO liable for willful infringement,
as well as active inducement of infringement of the '785
---- page ----
Patent, making this an exceptional case and justifying the assessment
of treble damages pursuant to 35 U.S.C. § 284, and the award of
attorneys' fees pursuant to 35 U.S.C. § 285.
PRAYER FOR RELIEF
WHEREFORE, counterclaim-plaintiff IBM prays that this Court enter
judgment on-the counterclaims in favor of IBM and against SCO:
(a) awarding IBM compensatory damages;
(b) awarding damages pursuant to 15 U.S.C. § 111 7(a);
(c) awarding IBM punitive damages;
(d) granting IBM treble damages pursuant to 35 U.S.C. § 284;
(e) granting IBM declaratory relief, ruling that SCO has
violated IBM's rights as outlined above;
(f) granting IBM injunctive relief, enjoining and restraining
SCO and its affiliates, subsidiaries, officers, agents, servants,
employees, attorneys, successors and assigns and all others persons
acting in concert with them, from further violating IBM's rights as
described above, including in particular from (i) misrepresenting SCO's
rights and IBM's rights to UNIX technology, such as that SCO can,
will or has in fact revoked IBM's right to use UNIX;
(ii) misrepresenting that IBM no longer has the right, authority
and license to use, produce and distribute AIX and IBM's Linux-related
products; (iii) publishing false and disparaging statements about AIX
and IBM's Linux-related products; (iv) engaging in further acts of unfair
competition; (v) claiming ownership rights over code made available
under the GPL; (vi) collecting license fees with respect to code
made available under the GPL; and (vii) further infringement or
inducement of infringement of the '746, '211, '209, '785 Patents;
---- page ----
(g) awarding IBM costs, expenses and reasonable attorneys fees
pursuant to 35 U.S.C. § 285,15 U.S.C. § 1U7(a), § 13-24-5 of the Utah
Uniform Trade Secrets Act, and N.Y. Gen. Bus. Law § 349(h);
(h) awarding IBM pre- and post-judgment interest on the
damages caused to IBM as a result of all wrongful acts alleged herein;
and
(i) granting IBM such other and further relief as this Court
deems just and proper, including costs, disbursements and reasonable
attorneys' fees.
JURY DEMAND
IBM demands a trial by jury on all issues so triable.
DATED this 6th day of August, 2003
(Log in to post comments)
SCO is like so hosed
Posted Aug 8, 2003 18:14 UTC (Fri) by NerdlyMcGeek (guest, #8453) [Link]
SCO has declinedto reveal the
---- page ----
particulars of the alleged violations in order to artificially and improperly
inflate the price of its stock.
For IBM to put this into the body of their counter claim pretty much sums it up. Darl and his cronies need to find a country with no extradition agreements. How much of a stretch would it be for an insider to roll and give States evidence?
SCO is like so hosed
Posted Aug 9, 2003 5:25 UTC (Sat) by mbp (subscriber, #2737) [Link]
The state is not a party to this suit, although perhaps it would be for future criminal charges.But somebody inside SCO may well have released some information. I wouldn't expect to hear about it yet though: IBM will likely save it until the decisive moment.
SCO is like so hosed
Posted Aug 11, 2003 5:46 UTC (Mon) by Guido (guest, #13892) [Link]
You guys should look at this:http://biz.yahoo.com/t/in/s/scox.html
The insiders at SCO are acquiring and selling stock, making a killing. Let's hope they join Martha Stewart in "Club Fed".
The text of IBM's counterclaims
Posted Aug 8, 2003 18:26 UTC (Fri) by dwalters (guest, #4207) [Link]
It's good to see that IBM are leveraging the GPL here. It shows that IBM really understand it, are comfortable with it, and that their lawyers are confident in it, and that bodes well for IBM's future involvement with Linux.
Contrast that starkly with SCOs lack of understanding of (or complete disrespect for) the GPL:
SCO's Blake Stowell admitted that SCO was still providing Linux source code and security patches on its Web site in order to fulfill support contracts with customers, but said "If our IP is being found in Linux and that's being done without our say, then I don't think that the GPL can force us not to collect license fees from someone who may be using our intellectual property".
I believe he's wrong. Section 7 of the GPL is very explicit in this regard:
7. If, as a consequence of a court judgment or allegation of patent infringement or for any other reason (not limited to patent issues), conditions are imposed on you (whether by court order, agreement or otherwise) that contradict the conditions of this License, they do not excuse you from the conditions of this License. If you cannot distribute so as to satisfy simultaneously your obligations under this License and any other pertinent obligations, then as a consequence you may not distribute the Program at all. For example, if a patent license would not permit royalty-free redistribution of the Program by all those who receive copies directly or indirectly through you, then the only way you could satisfy both it and this License would be to refrain entirely from distribution of the Program.
The text of IBM's counterclaims
Posted Aug 8, 2003 18:35 UTC (Fri) by dwalters (guest, #4207) [Link]
Sorry to reply to my own post, but I had also meant to point out that Stowell's statement does not agree with section 4 of the GPL:
4. You may not copy, modify, sublicense, or distribute the Program except as expressly provided under this License. Any attempt otherwise to copy, modify, sublicense or distribute the Program is void, and will automatically terminate your rights under this License. However, parties who have received copies, or rights, from you under this License will not have their licenses terminated so long as such parties remain in full compliance.
IANAL, but SCO's violation of the GPL appears to be nothing less than the misappropriation of the copyrights of the hundreds of individuals and companies that have contributed to Linux. They appear to be the ones who don't respect intellectual property.
The text of IBM's counterclaims
Posted Aug 8, 2003 19:43 UTC (Fri) by vonbrand (guest, #4458) [Link]
> I believe he's wrong. Section 7 of the GPL is very explicit in this regard:I'm not so sure... AFAIU it says that if _somebody else_ was to impose obligations on me that interfere with distributing freely, I can't distribute at all. In this case it is SCO themselves that impose the conditions, so it would look like they can distribute. Note that then the same GPL prohibits people who got Linux from SCO to distribute further.
IANAL, just a bewildered bystander in a country about to enter a free trade agreement (with IP rights and the works) with the USA.
The text of IBM's counterclaims
Posted Aug 8, 2003 22:11 UTC (Fri) by dmantione (guest, #4640) [Link]
Exactly, it's perfectly legal to license some open source software to someone, and thenlicense some of your other "intelectual property" to the same person under a different
license.
BUT, because the GPL does not allow you to link GPL code against non-gpl code, the
user cannot legally combine both pieces. This would mean the end user cannot legally
use Linux, wether or not he has an SCO license.
SCO did still violate the GPL, because by compiling a Linux kernel, they link what they
claim as non-GPL code to GPL code, which is not allowed.
The text of IBM's counterclaims
Posted Aug 8, 2003 23:33 UTC (Fri) by nix (subscriber, #2304) [Link]
SCO did still violate the GPL, because by compiling a Linux kernel, they link what they claim as non-GPL code to GPL code, which is not allowed.
Not quite right. It's permitted to links non-GPL code to GPL code, as long as none of the provisions of the GPL are violated. (Thus, you can link no-advertising-clause BSD-licensed code to GPLed code freely.)
The problem with SCO's situation is that their non-GPL code has more restrictions than the GPL. That is not allowed, under clause 6 of the GPL.
The text of IBM's counterclaims
Posted Aug 11, 2003 17:14 UTC (Mon) by leandro (guest, #1460) [Link]
> the user cannot legally combine both pieces. This would mean the end user cannot legally use Linux
Anyone can use any GPL code. The restrictions are on redistributing it.
The text of IBM's counterclaims
Posted Aug 11, 2003 17:48 UTC (Mon) by playfair (guest, #13918) [Link]
Seems, from reading the GPL, that anyone who buys a SCO license breaches the GPL and must stop using Linux and probably all other GPL software.Buying a license becomes an agreement under the terms of the section 7 quoted above.
So anyone who pays SCO for a license gets screwed by SCO and screws themselves, too.
The text of IBM's counterclaims
Posted Aug 11, 2003 12:50 UTC (Mon) by Wol (subscriber, #4433) [Link]
In which case, SCO would be welcome to use linux INTERNALLY. But they could NOT distribute it.The problem is, they have been DISTRIBUTING code, and now they are claiming that the recipients cannot distribute it further because it contains SCO IP. In other words, they are DISTRIBUTING a MIX of GPL and non-GPL code. Bang! Clause 4 goes off!
And the fact that they are STILL distributing linux code to all and sundry from their ftp server merely compounds their breach of copyright.
As I've mentioned elsewhere, there's a simple way round that, if they wanted to pull the ftp server and still remain in compliance with the GPL, but I'm not going to give them ideas ...
But the fact is, SCO *is* and has been distributing linux to world+dog. They are also claiming that the distributed code contains their proprietary IP, which *users* are obliged to licence. That claim promptly breaches the GPL, which means SCO are not entitled to distribute linux, which means SCO are breaking copyright law in a BIG way!
Cheers,
Wol
Zonk, thanks!
The text of IBM's counterclaims
Posted Aug 9, 2003 21:20 UTC (Sat) by uaimp (guest, #12170) [Link]
Who is still buying SCO stock at $10.75?
The text of IBM's counterclaims
Posted Aug 10, 2003 21:02 UTC (Sun) by entre (guest, #11626) [Link]
section / paragraph 22 change "me" to "the".22. SCO devised a scheme to profit from the UNIX rights that it
acquired from Original SCO, though UNIX was in no way developed by SCO.
Although most, if not all, of me UNIX technology that SCO purports to
own is generally known, available without restriction to the general public
or readily ascertainable by proper means, SCO undertook to create fear,
uncertainty and doubt in the marketplace in regard to SCO's rights in and
to that technology.
The text of IBM's counterclaims
Posted Aug 10, 2003 21:22 UTC (Sun) by entre (guest, #11626) [Link]
Change "m" to "in"Second Defense
SCO's claims are barred because IBM has not engaged m any unlawful
or unfair business practices, and IBM's conduct was privileged, performed
in the exercise of an absolute right, proper and/or justified.
The text of IBM's counterclaims
Posted Aug 10, 2003 21:24 UTC (Sun) by entre (guest, #11626) [Link]
Licensed typed twice22. States that it is without information sufficient to form a
belief as to the truth of the averments of paragraph 22, except admits
that AT&T Technologies, Inc. licensed licensed certain software to
IBM and Sequent.
The text of IBM's counterclaims
Posted Aug 10, 2003 21:33 UTC (Sun) by entre (guest, #11626) [Link]
"without"81. States that it is wimout information sufficient to form a belief
as to the truth of the averments of paragraph 81.
The text of IBM's counterclaims
Posted Aug 11, 2003 1:15 UTC (Mon) by niceguy2279 (guest, #13886) [Link]
OCR mistake?
The text of IBM's counterclaims
Posted Aug 11, 2003 14:10 UTC (Mon) by magician (guest, #13906) [Link]
Search for " me " (space m e space) there are, I believe, six occurances in the legal document, all of which should be "the"Similarly search for " die " (space d i e space) there is one occurance which should also be "the".
Some remaining typos
Posted Aug 11, 2003 14:26 UTC (Mon) by Antartica (guest, #13908) [Link]
Some typos that are still in the text:===CUT===
NATURE OF THIS ACTION/80./wimout -> without
AFFIRMATIVE DEFENSES/Second Defense/...engaged m any -> engaged in any
C. IBM and Linux/19./That SCO haa distibuted -> That SCO has distributed
C. IBM and Linux/19./is entitled to me protections -> is entitled to the protections
E. SCO's Scheme/22./if not all, of me UNIX technology -> if not all, of the UNIX technology
F. SCO's Lawsuit and Threats/26./injuction tenninating IBM's -> injuction terminating IBM's
===CUT===
Note that I've stopped reading in
SECOND COUNTERCLAIM/Lanham Act Violation
So I suppose that there may be some more O:-)
Disclaimer: I've repeated some of the ones found by other users... I suppose that it will be easier to the editor if they are collected in a single comment ;-).
BTW: Very interesting read :-b
Some remaining typos
Posted Aug 11, 2003 15:32 UTC (Mon) by rrt (guest, #13912) [Link]
And a couple more:"Exhibits 0" -> "Exhibits O"
"once apart" -> "once a part"
Typos / OCR errors
Posted Aug 11, 2003 15:38 UTC (Mon) by corbet (editor, #1) [Link]
I believe that all of the errors and typos reported in the comments have been fixed. If you find others, please send them to lwn@lwn.net. Thanks to all for helping us clean up the document.
Me, I don't like big gambles!
Posted Aug 11, 2003 22:17 UTC (Mon) by mla (guest, #13935) [Link]
A riveting document. But I am unconvinced of the wisdom of dragging GPL into it in such a prominent a way. SCO now have to demolish GPL to get anywhere, and they have nothing to lose in attempting to do so. Let's hope that IBM's legal eagles know what they are doing. Should GPL fall in court (which is always possible!), we have serious trouble. OTOH, if it stands, MS will be royally pissed.Anybody got the rules of two-chamber Russian Roulette handy for consultation? :-)
Me, I don't like big gambles!
Posted Aug 12, 2003 1:25 UTC (Tue) by namaseit (guest, #13940) [Link]
Actually it is a very good thing. I mean the fact that IBM is using the GPL as a way to bitchslap SCO is showing that they stand behind, support, and validate the GPL because they
are a huge company. I just got done reading "Rebel Code: Open Source and Linux History"
and IBM is a hard company to get to do anything. In the book they compare IBM to an
Elephant, hard to get moving. But once it is in the right direction its hard to stop. So I think
this is suck a huge thing that IBM is standing by the GPL. I think this will be the first case
that the GPL will be validated with. Which is a very good thing.
Betting on the favorite.
Posted Aug 12, 2003 12:03 UTC (Tue) by economy1 (guest, #13962) [Link]
The GPL was going to be tested in court at some point (that's ultimately the point of it, after all) and one can hardly imagine a better scenario than having IBM's legal resources vying to enforce its terms. I think open-source programmers should take heart. The only thing better would be if Microsoft were the GPL's champion. Reports are that some SCO management-types have been dumping stock recently as a result of all of this. Sounds like a good strategy...
Class-Action Lawsuit
Posted Aug 12, 2003 6:23 UTC (Tue) by Salmozn (guest, #13950) [Link]
Hi,I was reading the counterclaim of IBM and I just laughed at every section. SCO is so royalling f**ked. If SCO is profiting by distributing and selling licences that include code from GPL code which is the work of other contributors, then I smell a class-action lawsuit against SCO from the millions of linux developers under the GPL.
SCO should be sued for punitive damages, charged with stock fraud, and for every cent they received from their 'Fortune 1500' customer list.
If SCO tells me to pay for a linux licence, I will immediately call my lawyer to get the courts to charge SCO with fraud. Linux code, AIX code, etc, etc is not SCO's code. Simply packaging your code with GPL code does not make you have the rights to the code you did not develop.
What SCO is doing is like telling Microsoft that you own their source code and demand licencing fees.
SCO - another WorldCom, Enron, Martha, etc, etc.
Best quote, "IBM has more patent litigation lawyers than SCO has employees."
If it's less costly for IBM to buy-out SCO instead of incurring legal fees, then I think IBM should swallow up SCO. Case over.
Class-Action Lawsuit
Posted Aug 12, 2003 14:18 UTC (Tue) by solaufein (guest, #13972) [Link]
--> "If it's less costly for IBM to buy-out SCO instead of incurring legal fees, then I think IBM should swallow up SCO. Case over."No, see that would only serve to give money to the schumcks that are causing this disturbance. SCO had to know that there's no real hope of winning this case, and as previously stated, in many places, this is just an attempt to drive up stock value. Let SCO face the legal system with false evidence, let them be sued, let the execs face criminal time in the "pound me up the a$$ prison." I think that IBM will want to make an example of SCO, so that others do not try the same BS.
Linux is like so hosed
Posted Aug 12, 2003 13:01 UTC (Tue) by screed (guest, #13969) [Link]
I think you GPLers need to grow up and realize Linux is dead. SCO has you people by the balls. I have seen SCO's evidence and everything SCO has shown me has been true. IBM has contributed truckloads of SCO code into Linux. SCO has full rights to do what they have been doing. This will come out in court and Linux and the GPL will finally die a much deserved death. Buy your Linux licenses now, you will need them. I have recently migrated to UnixWare after seeing the evidence and have never been happier, I was tired of the Theives and code terrorists that often times lurk in the Linux train.
Linux is like so hosed
Posted Aug 12, 2003 13:35 UTC (Tue) by corbet (editor, #1) [Link]
+--------------+
| Don't feed |
| the trolls |
| |
| thank you |
+--------------+
| |
| |
| |
| |
....\ /....
Linux is like so hosed
Posted Aug 13, 2003 2:57 UTC (Wed) by Grievre (guest, #13993) [Link]
Linux is suiciding at our gates!
Linux is here to stay
Posted Aug 14, 2003 17:20 UTC (Thu) by mitchus (guest, #14051) [Link]
> I think you GPLers need to grow up and realize Linux is dead.This might be the worst case of bad judgment I've seen since that label that turned down the Beatles.
You think this will kill Linux?! Nowhere near it. Even if it turns out there is SCO code in the kernel, people will work at getting it the hell out of there. There is sufficient scaffolding and infrastructure to do this.
How could you possibly tear down a social contract like the GPL? Has it ever occurred to you that all the people who respect it CHOSE to do so? It represents a solid and transparent objective, and people have been rallying to this banner long enough to take this blow, and take it with a grin.
Pax, Mitchus
-------------
Penguins go through annual fasting periods. Breeding male emperor penguins may fast 90 to 120 days during courtship, breeding, and the entire incubation period (Davis and Darby, 1990).
The text of IBM's counterclaims
Posted Aug 18, 2003 17:50 UTC (Mon) by alobanov (guest, #14133) [Link]
Folks, this beautiful text needs an illustration. And it exist: "IBM managers writing counterclaim to SCO".
(for those who is interested with the real text of the counterclaim being written by those brave guys, including the initial claim: in Russian+Ukrainian and a (censored?) attempt of English translation. It is _really_ related to the article subject :-))))
It's a conspiracy of silence
Posted Aug 18, 2003 18:53 UTC (Mon) by Max.Hyre (subscriber, #1054) [Link]
The above documents do indeed have a striking similiarity to the papers in this case, but note that Mr./Ms. alobanov suggests redaction in the English.
Not being a Russian-reader, I tried the obvious: The Fish. While the first half seems pretty good for machine translation, it really deteriorates toward the end, where the good stuff lies.
Why won't anyone come clean here?
Best wishes,Max Hyre :-)