Judge Scolds SCO but Keeps Lawsuit Alive

by Timothy Prickett Morgan

If I have said it once, I have said it a hundred times: you never want to put yourself in the position of having your fate decided by a judge or a jury, because you never can tell what will happen. The SCO Group has been locked in mortal combat in a $3 billion lawsuit with former Unix partner IBM for almost two years now, and the federal judge in the case gave SCO a tongue lashing in his briefing but stopped short of delivering a motion to dismiss the case, as IBM has been asking.

Last Wednesday, after this newsletter went to press, U.S. District Judge Dale Kimball for the District of Utah denied the motion to dismiss, as well as separate motions put forth by IBM's lawyers for partial summary judgment on separate claims in the suit. Basically, Kimball said that he was unwilling to interfere with Magistrate Judge Brooke Wells' order that compels IBM to respond to further discovery by SCO's lawyers and to make available more source code for the AIX and Dynix Unix variants that IBM controls. Judge Wells has said that if IBM doesn't cooperate and give up the code, she will rule that SCO can have unfettered access to IBM's AIX and Dynix code repositories, which is a stunning prospect, especially since the weak evidence (which tongues have wagged about but few eyes have seen) that SCO has presented to date and the convoluted nature of the claims it has been making.

Judge Kimball got straight to the point in his ruling: "Viewed against the backdrop of SCO's plethora of public statements concerning IBM's and others' infringement of SCO's purported copyrights to the Unix software, it is astonishing that SCO has not offered any competent evidence to create a disputed fact regarding whether IBM has infringed SCO's alleged copyrights through IBM's Linux activities. Further, SCO, in its briefing, chose to cavalierly ignore IBM's claims that SCO could not create a disputed fact regarding whether it even owned the relevant copyrights. Nevertheless, despite the vast disparity between SCO's public accusations and its actual evidence--or complete lack thereof--and the resulting temptation to grant IBM's motion, the court has determined that it would be premature to grant summary judgment."

SCO has managed to get time for more and deeper discovery to search through IBM's AIX and Dynix code, and it has correctly argued that, as long as discovery has been granted, it makes no sense for Judge Kimball to throw out the case. That genie can't go back into the bottle. Judge Kimball has told IBM that it can file for summary judgment once again after the expanded discovery process is finished, and you can bet that that this is precisely what IBM will do.

The reason why Judge Kimball is playing it safe, despite what he has called the weak evidence presented by SCO (and remember, he and his clerks have seen the sealed evidence that CNET and G2 Computer Intelligence are trying to get unsealed as a sideshow to the SCO-IBM main event), is that he does not want to have his ultimate ruling in the case embarrassingly reversed on appeal, as happened in the Microsoft antitrust case a few years ago, which was ruled by his colleague U.S. District Thomas Penfield Jackson of the District of Columbia.

Plenty of people see this as a big setback for SCO or a win for IBM. I think it is very hard to say for sure. Heaven only knows what the lawyers will come up with next, except the certainty of big bills, of course.

IBM has two motions for partial summary judgment outstanding: one for SCO's claim of breach of contract by IBM, concerning its Unix licensing, and one for SCO's claim of copyright infringement. The company is expected to file briefs for these motions by February 25. Judge Kimball says he will not rule on these claims until after the discovery phase is finished. Kimball has also prohibited the parties from filing more motions until discovery ends. When that will be remains to be seen, since IBM is still arguing about what Judge Wells' order means.

This case looks like it is going to be around for a lot longer. The question now is how much energy SCO's lawyers, hotshots Boies Schiller & Flexner (who argued against Microsoft in the antitrust case), will have five quarters from now, when they have obtained all the retainer money they have been promised by SCO. By March 2006, Boies Schiller will be working not for fees, but just for a portion of the settlement, if there is any.