March 27, 2003 6:02 PM PST

IBM hires Boies' ex-firm in SCO lawsuit

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IBM has begun its legal response to the billion-dollar lawsuit filed against it by SCO Group, seeking to move the suit from Utah state to federal court and hiring the law firm that formerly employed SCO's high-powered attorney.

Representing IBM in the case is Cravath, Swaine & Moore, which will take on the high-profile David Boies of Boies, Schiller & Flexner in the SCO Group lawsuit. Boies worked for Cravath, Swaine & Moore for most of his career between 1966 and 1997, rising to partner and defending IBM in its years-long antitrust suit brought by the federal government.

Boies also represented the federal government in its antitrust case against Microsoft, Al Gore in his attempt to win a favorable Florida ruling in the 2000 presidential election, and Napster in its fight to defend its online music-swapping business.

Boies' current high-stakes case is SCO's suit against IBM, in which SCO alleges IBM misappropriated SCO trade secrets by taking SCO intellectual property in the Unix operating system and moving it into Linux. The suit also alleges unfair competition, breach of contract and tortious interference with SCO's business. SCO is seeking more than $1 billion in the case and is threatening to revoke IBM's license to ship its version of Unix, called AIX.

IBM representatives have taken issue with SCO's claims, but until now haven't taken formal legal action.

In a filing Wednesday, IBM said the case is better suited to federal court because the dispute involves parties from different states. IBM representatives weren't immediately available for comment.

IBM has political reasons for the move to federal court, said John Farrell, an intellectual-property attorney with Carr & Ferrell.

"Utah state courts, as many state courts, are very political and are often thought to favor local residents and companies. State judges are elected officials and run for re-election regularly, (but) federal judges have a job for life," Ferrell said. "Big companies from out of state hate to be 'home-towned' by small companies in state court."

SCO doesn't plan to fight the move to federal court, said Chris Sontag, senior vice president of operating systems at SCO and head of the company's SCOsource effort to recoup more money from its intellectual property.

"We filed in state court because we believed the claims we were making were most appropriate for state court. However, we believe we can be equally well served in federal court," Sontag said in an interview.

A move to federal court would open up new avenues for SCO not available in state court, including copyright and patent-infringement claims.

For now, Sontag declined to comment on whether SCO planned to broaden its suit. "Obviously, there are additional areas of the law associated with federal court, but right now, our complaint stands as it is," he said.

Some don't expect patent claims to emerge. Although patents for software processes are common today, they weren't when Unix was being invented by AT&T about 30 years ago, said Illuminata analyst Jonathan Eunice. And many that were would have expired and passed into the public domain by now.

"AT&T wasn't very aggressive and didn't acquire many patents. Unix techniques diffused into the community, and are now essentially in the public domain--either as the result of internationally accepted standards or open-source code," Eunice said.

In addition, "Distinctive things found in ancestral Unix...were often not, strictly speaking, unique inventions," Eunice said. Many ideas were extensions of ideas in operating systems such as Multics or IBM's OS/360 or in other projects, "so their patentability...would be questionable."

IBM has one more week before it must file a formal response to SCO's suit, Sontag said. After that will begin the legal process of "discovery," in which the two sides request and examine documentation and other information related to the case.

 

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