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2004 NOV 22 P 4:04

BY:  s/ [illegible]


A Delaware corporation,



a Delaware corporation,


Case No. 2004-056587-CK
Hon. Rae Lee Chabot

Hearing Date: November 24, 2004

Attorneys for Plaintiff
2000 Town Center, Suite 1500
Southfield, MI 48075
(248) 353-7620

Attorney for Defendants
39577 Woodward Avenue, Ste. 300
Bloomfield Hills, MI 48304-2820



Plaintiff The SCO Group, Inc. ("SCO"), respectfully submits this
memorandum of law in order to correct several factual and legal errors
contained in defendant DaimlerChrysler Corporation's ("DCX")
opposition to SCO's motion for a stay of proceedings.  As discussed
below, Daimler has failed to articulate a reasoned basis for denial of
SCO's request for a stay of proceedings pending a determination of the
motion for summary judgment in the related IBM case.  DCX's feigned
umbrage at SCO's request for a stay is insufficient to overcome the
advantages to judicial efficiency and conservation of party resources
that counsel in favor of a limited stay of these proceedings.

			  Factual Background

Following a court appearance on July 21, 2004, the Court entered an
order on August 9, 2004, granting in part and denying in part DCX's
motion for summary disposition.  Contrary to the suggestion in DCX's
papers, DCX contacted SCO's counsel on only two occasions to discuss
the conduct of further proceedings in this case -- during the last week
of August and on September 15, 2004.  In fact, in August, counsel
worked together to propose an Amended Scheduling Order in the case that
contained extended dates for discovery of the remaining timeliness

DCX also erroneously states that SCO did nothing until November 5,
2004, when it requested that DCX stipulate to a limited stay of this
action.  To the contrary, SCO contacted DCX counsel on October 20,
2004, in an attempt to propose a limited stay of proceedings, before
receiving DCX's initial discovery demands relating to the timeliness
claim.  After an exchange of telephone messages between counsel, SCO
formally requested DCX's consent to a limited stay on October 26, 2004
in the course of a telephone conversation with DCX counsel.  DCX did
not respond to SCO's request until November 5, 2004, when DCX counsel
indicated that his client would not consent.  In the course of the
November 5 telephone conversation, SCO


requested that DCX reconsider the stay proposal, and proposed the
alternative of a voluntary dismissal of the remaining claim in the
case.  On November 8, 2004, SCO, by email, reiterated its request that
DCX reconsider a limited stay of proceedings, and in the alternative,
forwarded a proposed "Stipulated Order of Dismissal Without Prejudice
and Without Costs" for DCX's consideration.  DCX responded to SCO's
proposals by letter dated November 12, 2004, in which it stated that
it would oppose a dismissal of the remaining claim without prejudice.
Finally, the efforts expended by DCX's counsel on the remaining
timeliness claim have consisted of limited discovery demands received
October 20, 2004; brief witness and exhibit lists dated October 27,
2004; and a four-page case evaluation summary dated November 16, 2004.
Much of DCX's limited efforts were expended following notice from SCO
that it intended to seek a stay of proceedings or a voluntary
dismissal of the remaining timeliness claim.  What should not be lost
in the face of DCX's posturing and hyperbole regarding SCO's alleged
"gamesmanship," "tactic[s]," and 'naked effort to manipulate the Court
system" is that this action would not have been brought but for DCX's
admitted failure to respond to SCO's request for a certification of
its compliance with its UNIX license agreement until after this
lawsuit was filed -- a certification that DCX has conceded was
required by its very conduct in supplying a certification 110 days
after it was requested.

			    Legal Analysis

As stated in SCO's stay motion, this Court clearly has the authority
to exercise its discretion and stay proceedings in any case on its
docket for good cause.  The authority to stay an action while another
case is proceeding is inherent and, contrary to the statement
footnoted in DCX's response (DCX Mem. at 3 n.2), is not subject to the
requirement that the two cases involve the identical parties and


The authority DCX cites for its erroneous conclusion is based on two
cases involving the former "plea of abatement by prior action."  The
defense of plea of abandonment is now codified as a ground for summary
disposition in MCR 2.116(C)(6).  When another action has been
initiated between the same parties involving the same claim, the
second action is subject to dismissal.  The rule is designed to stop
parties from endlessly litigating matters involving the same questions
and claims as those presented in pending litigation.  Kowry v
University of Michipan, 441 Mich 1,20 (1992) (Riley, J. concurring).

Since a plea of abatement is not being offered in this
case by either party, the rule cited by DCX is not applicable to SCO's
request for a stay.  Furthermore, a stay of proceedings has been
authorized by the Michigan Supreme Court in order to promote judicial
economy.  In Consumers Power Co v Michigan Public Utilities Commission,
270 Mich 213 (1935), three citizens started an action against the City
of Saginaw and Consumers Power Company to invalidate a contract for the
furnishing of natural gas.  While that suit was pending, the City filed
a petition before the Public Utilities Commission to fix the rate for
natural gas.  Rather than dismiss the second action, the Supreme Court
ordered the commission to stay the proceedings while the validity of
the underlying contract was being litigated:

    But it is apparent that the Michigan public utilities commission
    cannot proceed to a determination of a reasonable rate for natural
    gas in the city of Saginaw except upon the assumption that the
    city is not bound by the contract of June, 1933.  If in so
    assuming the utilities commission should be in error, appellant
    will have been uselessly subjected to the expense and
    inconvenience of a proceeding before the utilities commission to
    determine the charge to be made in Saginaw for natural gas
    furnished by appellant.  To avoid even the possibility of a
    useless and burdensome proceeding before the commission, as well
    as to preserve the orderly administration of justice, we think the
    proceedings pending before the Michigan public utilities
    commission should be held in abeyance until decision of the case
    pending in the Federal court.

Id. at 217-218 (emphasis added).


SCO's request for a stay of proceedings is fully appropriate under the
standard adopted in the Consumers Power case.  First, as a practical
matter, litigation of the timeliness issue in this case -- which is
important to establish that UNIX licensees like DCX are required to
timely provide a certification in response to the licensor's request,
rather than ignore such a request -- will only be necessary if the
license agreement at issue is interpreted in such a way as to protect
SCO's rights to control its intellectual property (beyond the mere
literal source code) in UNIX.  It is important to recall that prior to
the filing of this law suit, while the IBM case was ongoing, SCO had
merely sought to collect information about compliance with its UNIX
licenses from hundreds of its licensees here and abroad.  To
accomplish this purpose, SCO used letters, not litigation.  It was
only because DCX ignored SCO's request that SCO went to court to
enforce its certification right.  The issue of the scope of the
certification was raised by DCX's own motion, which this Court decided
on summary disposition was significantly narrower than urged by SCO.
Once this Court ruled as it did, the usefulness of obtaining
certifications from DCX and other licensees was greatly reduced.  In
other words, SCO's effort to collect information in advance of a
ruling in the IBM case has been substantially impeded, and it now
makes practical sense, both from the standpoint of both the Court's
and the parties' resources, to await a summary judgment ruling in the
IBM case before proceeding to litigate either the timeliness claim in
this case or to appeal this Court's order regarding the scope of the
required certification under the UNIX license agreement.

Thus, SCO is not suggesting in its motion for stay that the issues in
the IBM case and the instant case are identical.  The issues are,
however, as explained above, closely related in a practical sense.
Moreover, a ruling in the IBM case as to the scope of the protections
and restrictions contained in the UNIX license agreement will have the
further consequence of informing SCO and its licensees what their
rights are under the license agreement, and this, in


turn, will make the certification requests and licensees' responses
thereto, more meaningful than they would be in the absence of such a


For all of the foregoing reasons and the reasons stated in its Motion
for Stay of Proceedings, SCO respectfully requests that its motion for
stay be granted.

Respectfully submitted,


By: [s/ Barry M. Rosenbaum]
   Barry M. Rosenbaum (P26487)
   Attorneys for Plaintiff
   2000 Town Center, Suite 1500
   Southfield, MI 48075-1195
   (248) 353-7620

Dated: November 22,2004

Steven I. Froot, Esq.
Co-Counsel for Plaintiff
Boies, Schiller & Flexner
570 Lexington Avenue, 16th Floor
New York, NY 10022

Mark J. Heise, Esq.
Co-Counsel for Plaintiff
Boies, Schiller & Flexner LLP
Bank of America Tower
100 South East 2nd Street, Ste. 2800
Miami, FL 33131
(305) 539-8400

2004BMRnmh(10098)=\\SERVER\voldocs\litigat\s014198\reply brief to motion for stay 002.doc=1122