AutoZone Fights Back Against SCO

AutoZone is fighting back against SCO by asking the court for a change of venue and for its case to be put on hold until SCO has resolved its legal issues with IBM, Novell and Red Hat.

Seven weeks after The SCO Group Inc. sued AutoZone Inc. for allegedly violating SCOs Unix copyrights through its use of Linux, the Memphis, Tenn.-based auto parts chain has asked that its case be stayed until there is resolution of SCOs pre-existing major lawsuits with IBM, Red Hat Inc. and Novell Inc.

AutoZone was the first case in which SCO sued a Linux-using company. SCO immediately followed this up by suing DaimlerChrysler AG in a Michigan state court both on the Linux grounds and for Unix contract violations. AutoZone has answered SCOs lawsuit against it in the U.S. District Court in Utah by filing a response on April 23.

Since it filed the two lawsuits, SCO has had a rocky road filled with vicissitudes. On April 6Delaware Federal Judge Sue L. Robinson issued an order that denied SCOs motion to dismiss Red Hats case. Simultaneously, however, she stayed the case pending the outcome of SCO vs. IBM. Red Hat is appealing this stay saying in its Motion for Reconsideration that "Red Hat will suffer manifest injustice from a stay, since SCO apparently intends to continue to harass and threaten suit against Red Hats customers in other jurisdictions, while Red Hats declaratory judgment suit here, which was intended to prevent this precise harm to it and its customers, is forced to languish."

In addition, IBM officials have said they will file for a summary judgment against SCO as soon as the discovery and pretrial motions are complete.

That Red Hat would appeal and IBM would file for a summary judgment could only be expected, but SCO officials have said they were caught by surprise when BayStar Capital Management LLC informed SCO that it was in violation of their financing agreement and that it was demanding SCO to immediately redeem BayStars 20,000 shares of SCOs series A-1 convertible preferred stock.

By April 22, though it had become clear that what BayStar is really trying to do is gain more control over SCO, which BayStar feels is not doing enough in its intellectual property case against IBM. SCO, though, is not giving in to BayStars demands to change its executive management and to drop its non-intellectual property related businesses such as the sale and support of UnixWare and OpenServer.

Then, on April 23, AutoZone made its move. Philip Albert, an intellectual property attorney and open-source software specialist and partner in the San Francisco office of Townsend and Townsend and Crew LLP, described AutoZones legal efforts as, "In essence, it appears that the hundreds of pages can be reduced to three requests AutoZone makes of the court: 1) Let this case be moved to Tennessee, where AutoZone is located; 2) put this case on hold until the other cases are resolved because once those are resolved, our case is much simpler and thus easier to resolve; and 3) if you dont put the case on hold, at least require SCO to tell us more about their allegations."

Albert thinks other Linux-using companies that will be sued by SCO will follow a similar path. "If a company is sued near their home base, they would not likely bother with a motion to change venue, but in AutoZones case, it looks to be a good idea to try," he said. "As for the other two motions, I think it is an easy decision—try for the stay and request more information. You can even use AutoZones motions as templates."

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