PUBLISH UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT

________________ _________________ THE SCO GROUP, INC., Plaintiff Counterclaim Defendant - Appellant,

v. INTERNATIONAL BUSINESS MACHINES CORPORATION, Defendant Counterclaimant - Appellee. No. 16-4040

________________ _________________ Appeal from the United States District Court for the District of Utah (D.C. No. 2:03-CV-00294-DN)

________________ _________________ Edward Normand, Boies, Schiller & Flex ner LLP, Armonk, New York (Jason C. Cyrulnik, Boies, Schiller & Flexner LLP, Arm onk, New York, Stuart H. Singer, Boies, Schiller, & Flexner LLP, Fort Lauderdale, Florida, Brent O. Hatch and Mark F. James, Hatch, James & Dodge P.C., Salt Lake City, Utah, with him on the briefs), for Plaintiff Counterclaim Defendant-Appellant. David Marriott, Cravath, Swaine & Moore LL P, New York, New York (Evan R. Chesler, Cravath, Swaine & Moore LLP, New York, New York, Amy F. Sore nson and Amber M. Mettler, Snell & Wilmer L.L.P., Salt Lake C ity, Utah, with him on the briefs), for Defendant Counterclaimant-Appellee.

________________ _________________ Before KELLY , EBEL , and BACHARACH , Circuit Judges.

________________ _________________ EBEL , Circuit Judge.

________________ _________________ FILED United States Court of Appeals Tenth Circuit 

### October 30, 2017

Elisabeth A. Shumaker Clerk of Court2 This case arises out of a business deal gone wrong. The Sa nta Cruz Operation, Inc. (Santa Cruz) entered in to a business arrangement w ith International Business Machines Corp. (IBM) to develop a new op erating system that would run on a more advanced processor manufactured by Intel Co rporation (Intel). The parties signed an agreement memorializing this collaborativ e effort and called it Project Monterey. Another technology company, The SCO Group, Inc. (SCO), then acquired Santa Cruz’s intellectual property assets and now brings this lawsuit for IBM’s alleged misconduct during and immediately after Project Monterey. Project Monterey involved mutual c ontributions by IBM a nd Santa Cruz of proprietary materials, includ ing computer code for their respective operating systems. SCO believes that IBM merely pretended to go along with the arra ngement in order to gain access to Santa Cruz’s coveted source code . SCO, the successor-i n-interest to Santa Cruz’s intellectual property assets, accused IBM of stealing and improperly using this source code to strengthen its own operating sy stem, thereby committing the tort of unfair competition by means of misappropriation. The district court awarded summary judgment to IBM on this claim based on the independent tort doctrine, which bars a separate tort action where th ere is no violation of a duty independent of a party’s contractual obligations. SCO also accused IBM of di sclosing Santa Cruz’s prop rietary materials to the computer programming community for inclus ion in an open-source operating system called Linux. When SCO acquired Santa Cruz’s assets involved in Project Monterey and then sought licensing agreements from va rious technology companies, IBM allegedly3 instructed SCO’s business affiliates and invest ors to cut ties with SCO. These alleged efforts to disrupt SCO’s business relationshi ps, together with the purportedly improper Linux disclosures, prompted SCO also to file suit against IBM for tortious interference of contract and business relations. In a sepa rate order, finding in sufficient evidence of actionable interference by IBM, the district co urt granted summary judgment in favor of IBM on these tortious interference claims. Finally, after the deadline for amended pleadings in this case, SCO sought leave to add a new claim for copyright infringement ba sed on the allegedly stolen source code from Project Monterey. SCO claimed it had only discovered the essential facts to support this claim in IBM’s most recent discovery disc losures. The district court rejected SCO’s proposed amendment for failure to show good cause. SCO now appeals all three decisions by the district court: (1) the summary judgment order on the misappropriation claim; (2) the separate summary judgment order on the tortious interference claims, and (3) the denial of leave to amend the complaint. We REVERSE and REMAND the district court’s summary judgment order on the misappropriation claim, and AFFIRM as to the remaining issues.4 I. BACKGROUND A. UNIX Operating System and Intel Processors UNIX is a computer software operating system that is widely us ed in the business or “enterprise” computing environment. 1 In the late 1960s, AT&T Technologies developed UNIX and began li censing it for widespread enterprise use, and those licensees in turn developed and distributed their own variations of the UNIX platform. One of those distributors, Santa Cruz, cr eated a UNIX variation which eventually dominated the market for UNIX-based opera ting systems running on Intel processors. During the 1980s, most other companies were running their UNIX variations on more expensive non-Intel architectures. Sa nta Cruz, however, recognized early on that transistors were getting smaller over time, so Intel’s cheaper processors were becoming faster and thus more capable of handlin g the demands of high-power enterprise computing. Santa Cruz predicted that Inte l’s less-expensive processors would soon be able to run the UNIX operati ng system more effectively th an earlier iterations of the hardware. By 1998, Intel processors had be come as capable as the more expensive alternatives, and Santa Cruz had ultimately become the worldwide market leader for UNIX-on-Intel with 80 percen t share of the market.
In contrast to Santa Cruz , IBM had almost no presence in the UNIX-on-Intel market. Instead, IBM distributed its ow n UNIX derivative called AIX, which was designed to operate on IBM’s own proprietar y Power processors. The product was thus

1 An operating system serves as the link between the computer hardware and the various software programs or applicati ons that run on the computer.5 suitably known as AIX for Powe r. Recognizing that Santa Cr uz had positioned itself as the market leader for UNIX-based syst ems on the increasingly desirable Intel architecture, IBM began considering the bene fits of collaborating with Santa Cruz. Further, IBM knew that Santa Cruz’s opera ting system was based on a more advanced version of the UNIX operating system: Unix Ware System V Release 4 (SVr4). IBM’s own AIX platform was based on an earlier and less advanced code, so the opportunity to work with SCO and gain access to the SVr4 code may have been appealing. Santa Cruz, for its part, also appreciated the advantages of working with IBM, which was a larger company with more resources, retail relations hips, and marketing outlets. So the stage was set for a mutually benefi cial cooperative venture.

B. Project Monterey and the Jo int Development Agreement Before IBM and Santa Cruz began working together, most processors (including Intel’s chips) operated only at a 32-bit capacity , but in 1994, Intel announced its intention to develop a higher-capacity 64-bit chip called Itanium. Anticipating Intel’s forthcoming Itanium architecture, Santa Cruz and IBM join tly endeavored to bu ild a new UNIX-based operating system that would r un on the faster processor. In October 1998, Santa Cruz and IBM entered into a Joint Developmen t Agreement (JDA) that would govern the mechanics of their collaboratio n, including licenses, royalties, and project management responsibilities. This endeavor be came known as Project Monterey. As part of the JDA, each party granted the other a lim ited license to its own respective technologies fo r the purpose of developi ng the IA-64 Product.6 After signing the JDA, the parties entered into a Project Supplement that provided: “The Licensed Materials . . . are to be used solely for development of the IA-64 Product.” Aplt. App. 884 (emphasis added). Accordin g to SCO, this provision imposed a default rule that IBM could not use Santa Cruz’s cont ributed materials in its own AIX for Power. That Supplement, however, also included a caveat: “Notwith standing [that limitation], any such Licensed Material included in the IA- 64 Product Release 1 shall be licensed pursuant to the terms and cond itions set forth in the [JDA]. ” Aplt. App. 884 (emphasis added). In other words, any Santa Cruz materials that ultim ately found their way into the “IA-64 Product Release 1” woul d be licensed to IBM pursuant to the JDA, which in turn granted IBM a “worldwide, non-exclusive, roya lty free” right of use, Aplt. App. 3085, JDA § 2(d)(2). Under these pr ovisions, IBM would have know n that if it wanted to use Santa Cruz’s materials in AIX for Power, th ere must be a “IA-64 Product Release 1” containing those materials. SCO further points out that a product re lease is only regarded as the “IA-64 Product Release 1” if the product is made generally available . This requirement is based on Amendment 5 to the JDA, wh ich provided that if IBM wanted to distribute a “PreRelease IA-64 Product” for testing purposes, that pre-release sublicense would terminate at least by the date of “gener al availability of the IA-64 Pr oduct Release 1.” Aplt. App. 5157. Otherwise stated, any distribution of the Monterey system before the product became generally available was regarded merely as a “Pre-Release IA-64 Product,” not the actual “IA-64 Product Release 1” itself. Thus, to the extent that IBM wanted a “worldwide, non-exclusive, royalty free” licen se to the coveted SVr4 code, it needed to7 wait until there was a generally available rele ase of the IA-64 Product which included that code. 2

C. IBM Transitions Focus from Project Monterey to the Linux Operating System The success of Project Monterey hinged on the forthcoming availability of Intel’s 64-bit Itanium chip. Bu t Intel was behind schedule in de veloping and delivering Itanium to market. Intel anno unced a target date of 1999, bu t was substantially delayed, and continued to have de velopment difficulties throughout 1 999 and 2000. These delays caused a decrease in market interest in th e IA-64 Product under construction through Project Monterey. The slump in market interest for the IA -64 Product caused IBM to transition its focus to a competing open-source operating sy stem called Linux. 3 At the time, Linux occupied the lower end of the computing ma rket as it was designe d for lower-capacity desktop computing. But IBM began to strengt hen the Linux platform so that Linux could compete in the enterprise mark et, which was the focus of Pr oject Monterey’s forthcoming UNIX-based product.

2 IBM does not appear to dispute this interpretation. Moreover, SCO offered evidence that IBM shared this understanding during the course of Project Monterey. For example, an internal IBM memo indi cated that IBM believed withdrawal from Project Monterey would mean forfeiti ng access to Santa Cruz’s SVr4 code. See Aplt. App. 9059-60.

3 Unlike other UNIX-based systems, Linux is distributed without a fee to users, and the programming code is publicly available to all who want to acces s or customize it.8 As part of its contributi ons to Linux, as early as February 2000, IBM began disclosing some of Santa Cruz’s proprieta ry UNIX technologies—acquired through Project Monterey—to the Linux community for the purpose of fortifying Linux as a commercially viable option for enterprise us e. The evidence su ggests that “SCO’s revenues decline[d] precipitous ly in 2000 th rough 2002, dropping 74%, immediately after the first alleged contributions of IBM in Febr uary of 2000.” Aplt. App. 7384. SCO’s sales dropped as customers migrated to Linu x, which has been referred to as a “free UNIX clone.” Aplt. App. 7389. Because of these declining revenues, SCO relies on IBM’s Linux disclosures as part of the ba sis for its tortious-interference claim. IBM’s general support for Linux, howeve r, was no secret. As early as March 1999, IBM publicly announced its support of Linux at a LinuxWorld conference. But scaling up Linux to compete in the enterpri se market posed a potential conflict with Project Monterey. To assuage concerns, IBM began re-assuring the public and Santa Cruz that Linux and the IA- 64 Product would compete in different markets, so there was no conflict. For example, in August 1999 , IBM officers explained publicly that the Monterey IA-64 Product would target enterp rise-level computing needs while Linux was designed for the smaller-scale computing market . IBM made similar representations in a private meeting with Santa Cruz officers in January 2000. But at least one IBM executive recognized that such a distinction was fragile: The distinction used to position Monterey versus Linux is that Monterey is targetted [sic] fo r high-end servers, where as Linux comes in at the lower to mid range of servers. However, this distinction is a fragile one, since IBM is9 working as fast as it can to bo lster Linux’s ability to compete in the mid to high end range of servers

. Aplt. App. 5693 (emphasis added). Constr uing the evidence in SCO’s favor, it may be that IBM led Santa Cruz to believe its Linux product would not compete against enterprise-level developers—but IBM was ac tually working quickly, and without Santa Cruz’s knowledge, to scale up Linux to comp ete in the enterprise space. Meanwhile, IBM maintained that it was fu lly committed to Project Monter ey. It reaffirmed that commitment in the January 2000 meeting and, as late as December 2000, IBM stated publicly that its devotion to the success of the IA-64 Product remained strong. But a jury could find that IBM’s heart wa s not in Project Monterey. Throughout late 1999 and early 2000, IBM executives began recommending “internally that IBM take more definitive steps to drop Project Monterey and trans ition even more support to [Linux].” Aplt. App. 9591, Dist. Ct. Op. at 24 . In July 2000, anot her IBM internal report recommended a “significant reduction in emph asis” in Project Monterey. Aplt. App. 6202. Further, IBM’s effort to bolster Linux as a potential competitor in the enterprise space could indicate to a jury that IBM was not fully committed to the success of Project Monterey, despite its public assurances to the contrary.

D. IBM’s Alleged Misappropriation of Santa Cruz’s Code In October 2000, IBM used so me of the SVr4 code in a test version of its own AIX for Power product, which was intended fo r certified software de velopers and “not intended for general production use.” Aplt. A pp. 8610. This appears to have been a preparatory step in anticipation of later re leasing an upgraded AIX for Power product for10 general distribution. But again, IBM woul d need to make generally available the Monterey operating system including the SVr4 code be fore IBM would acquire the royalty-free license for general distributio n of that code in its own products. With that in mind, IBM announced in Ap ril 2001 a forthcoming IA-64 Product, which included the SVr4 code , and planned to make it ava ilable on May 4, 2001. As scheduled, IBM released a version of the Mont erey operating system on May 4, 2001 as a Programming Request for Price Quote (PRPQ), wh ich is the term used internally at IBM to describe beta test releases. This release lacked what is known as a compiler, which in this case refers to a software program that translates programming code into a language readable by the computer processor. Without a compiler, an operating system cannot be executed by the processing hardware, but it doe s not seem that IBM had a confirmed plan to include a compiler in the pr oduct. Moreover, this Monterey release was offered free of charge and without support, wa s not on IBM’s price lists, and was not marketed. In light of these characteristics, a reasonable jury co uld find that this PRPQ version was not a generally available release of the product and thus did not entitle IBM to a royalty-free license to the SVr4 co de included therein. 4

4 One internal e-mail from an IBM executive defending the PRPQ release cuts in the other direction, explaining that IBM had “a very positive product to deliver” that was “not under-function for this target delivery” and was “s table and worth release.” Aplt. App. 5167. But this is a disputed i ssue of material fact. On summary judgment we adopt the version of the facts most favor able to SCO, which suggests that IBM’s May 4, 2001 PRPQ of the Monterey produ ct was not equivalent to a generally available release.11 Moreover, the evidence suggests that IBM was conscious of the inadequacies of this May 4, 2001 release of the Monterey pr oduct. For example, an IBM project manager stated in an internal e-mail: “I think the compiler MUST be av ailable in some form or the whole thing just doesn’t make sense ( ie [ Santa Cruz ] won’t buy it ).” Aplt. App. 5194 (italicized emphasis added). And another inte rnal IBM strategy document explained that there was “no confirmed compiler plan” and th at IBM would “[c]ontinue to ship AIX 5L as a PRPQ” which would be in “[s]tealth mode only.” 5 Aplt. App. 5170. That document also indicated that IBM would “[a]t the a ppropriate time announce plan not to GA AIX 5L and withdraw the PRPQ” sometime during the “July/August timeframe.” 6 Id. What is more, one piece of evidence suggests that IBM appears to have known that the May 4, 2001 PRPQ version might not have been suffi cient to acquire the SV r4 license. In one internal e-mail, an IBM employee stated: “As you know, we need to GA this PRPQ to gain rights to [Santa Cruz] code we want for our base AIX produc t delivery . . . I know the fine lines we are walki ng here.” Aplt. App. 5167. Nevertheless, despite the deficiencies in the May 4, 2001 release of the Monterey operating system and despite IBM’s apparent knowledge of the problem, that very same day IBM released for general distribution a vers ion of its own proprietary AIX for Power product that included the SVr4 code. SCO thus argues that IBM released a “sham”

5 The reference to “AIX 5L” appears to be IBM’s shorth and for the product released for operation on Intel’s IA-64 processor.

6 We assume the acronym “GA” to be a refere nce to “general avai lability” of the IA64 Product.12 version of the Monterey system in order to legitimize its own genera l distribution of the AIX for Power product containing Santa Cruz’s SV r4 code. (Aplt. Br. 2, 13.) This is the essence of SCO’s misappropriation claim. 7

E. Santa Cruz Transfers Assets to Caldera International Santa Cruz owned a license to use, develop, and distri bute its UNIX-based technology. 8 During the life of Project Monterey, however, Santa Cruz decided to sell its UNIX business to SCO. 9 In mid-June 2000, Santa Cruz se nt IBM an official notice of the

7 SCO’s initial claim of misappropriation wa s based not on the allegedly stolen SVr4 code, but rather on the improper Linux disclo sures discussed earlier. SCO says it discovered the SVr4 code in the AIX for Po wer product late in the discovery process after filing this lawsuit, which is why the current misappropriation theory differs from the original theo ry. IBM does not appear to dis pute, however, that a party can change its theory for a part icular existing cause of acti on as new evidence comes to light during the discovery process. Mo reover, the language of SCO’s operative complaint encompasses this revised theory. The cause of action is labeled “unfair competition” and it is based, in part, on “[m]isappropriation of source code, methods, and confidential information of plaintiff,” as well as “[ u]se of deceptive means and practices in dealing with plai ntiff with respect to its soft ware development efforts[.]” Aplt. App. 156.

8 A company called Novell, Inc. (Novell) purchased the UNIX asse ts and intellectual property rights from AT&T (the original de veloper) in 1993, and later sold its UNIX business to Santa Cruz in 1995. As described in two earlier decisions of this Court, Santa Cruz did not receive the full panoply of intelle ctual property rights in that 1995 transaction, but rather received only a licen se to use, develop, and distribute Novell’s copyrighted UNIX technologies. See SCO Gr oup, Inc., v. Novell, Inc., 439 F. App’x 688, 691-93 (10th Cir. 2011) (unpublished); SC O Group, Inc. v. Novell, Inc., 578 F.3d 1201, 1204-06 (10th Cir. 2009).

9 At the time of this transaction, pl aintiff SCO went by the name Caldera International. For consiste ncy and convenience, we use the SCO label to describe plaintiff even at the time that it acquired Santa Cruz’s intellectual property rights.13 forthcoming asset transfer to SCO. 10 Hearing no formal objection from IBM, Santa Cruz followed through with th e agreement and, on May 7, 2001, finalized the deal with SCO. On June 6, 2001, Santa Cruz informed IBM of the consummation of the sale and the assignment of the rights under the JDA. IBM then responded on June 19, 2001, formally objecting to the assignment and officially te rminating the JDA, th ereby putting a formal end to Project Monterey.

F. IBM’s Alleged Direct Interference Wi th SCO’s Business Relationships In late 2002 and early 2003, SCO began investigating the in tellectual property within Linux and discovered that Linux customers were using SCO’s proprietary UNIX technologies. SCO then devised a licen sing strategy whereby Linux users would purchase from SCO a license to use Linux, as enhanced by SCO’s proprietary technologies. SCO presented this licensing plan to multiple partners, including Oracle, Intel, and Computer Associates, all of whic h responded favorably. IBM, on the other hand, objected to the proposed strategy. IBM asked SCO not to issue its pre ss release announcing and initiating the licensing plan. Nevertheless, in January 20 03, SCO announced a new business division, SCOsource, to manage the licensing of its UNI X technologies for Linux customers. The

10 The JDA governing Project Monterey required Santa Cruz to give IBM notice if Santa Cruz received an offer by another company to purchase s ubstantially all of Santa Cruz’s assets. Aplt. App. 3109, JDA § 16.1. This requirement was apparently designed to give IBM a reasonable period of time to submit a coun teroffer. Id., JDA § 16.2.14 next day, IBM executive Karen Smith told SCO’s CEO Darl McBrid e that she expected SCO’s approach to “kill Linux.” Aplt. App. 4095. She fu rther threatened: [I]f [SCO] did not drop [its] li brary licensing program and [its] investigation of Linu x and withdraw [its] press release . . . , that IBM was goi ng [to] cut off all business from [SCO] and they were going to encourage partners and customers from doing any bus iness with SCO as well. Id. at 4095. SCO did not ba ck down. That afternoon, Sm ith met with Hewlett-Packard executive Richard Becker. Accord ing to Becker’s deposition, [Smith] indicated to [him] that IBM was going to withdraw all their business activities from SC O, and that in the interest of the best outcome for [IBM’s and Hewlett-Packard’s] joint Linux initiatives that she was going to suggest that HP, and [he] was representing HP, and fo llowing [him], Intel should do the same. Aplt. App. 2352. SCO believes that, in addition to Hewle tt-Packard, IBM directly communicated with other SCO business affiliates and investors in an effort to persuade those entities to refrain from doing business with SCO. Those entities included Oracle, Computer Associates, Intel, and Baystar. SCO pr esented evidence that, after SCO began implementing its licensing strategy, these en tities began withdrawing or reducing their business dealings with SCO. IBM respon ded, however, with sworn declarations by executives representing each entity indicating th at, to the best of their knowledge, IBM never approached them about cutting ties w ith SCO and that any change in business dealings with SCO was not the result of IBM’ s statements or actions. Nevertheless, SCO15 asserts that IBM directly in terfered with SCO’s business re lationships by inducing SCO’s key investors and affiliates to ce ase doing business with SCO.

G. Procedural Background We are now almost fifteen years into this litigation. SCO filed the initial Complaint on March 6, 2003, which in cluded nine claims against IBM. 11 After twice amending its Complaint, SCO sought leave to amend a third time in October 2004, after the deadline for amended pleadi ngs, for the purpose of adding a tenth cause of action for copyright infringement based on IBM’s alleged misuse of th e SVr4 code. The district court denied that motion, finding insufficien t cause to permit the untimely addition of the claim. The case then proceede d but was administratively clos ed in 2007 after SCO filed for bankruptcy. Alongside its suit against IBM, SCO also filed suit against another company called Novell, which had publicly claimed that it, ra ther than SCO, owned the UNIX copyrights. Novell entered into an asset purchase agreement with Santa Cruz in 1995 wherein Novell transferred a license to the UNIX technology to Santa Cruz. Santa Cruz believed that it had received through this asset transfer the UNIX copyrights, and thus the right to license

11 Counts 1 through 4 alleged breaches of the original software and sublicensing agreements between IBM and AT&T (the original UNIX developer), and between Sequent Computer Systems, Inc. (which was later acquired by IBM) and AT&T. Count 5 alleged copyright infringement ba sed on SCO’s later-dis proven belief that it owned the UNIX copyrights. Count 6 alle ged unfair competition by means of, in part, misappropriation. Count 7 alleged tortious interfere nce of SCO’s contracts with Linux users and licensees. Count 8 allege d tortious interfere nce of SCO’s asset purchase agreement with Novell executed in 1995. Count 9 alleged tortious interference of SCO’s speci fic business relationships.16 all derivations and variations of the UNIX system. That belief, however, ended up being wrong. In 2011, this Court a ffirmed a jury verdict that fou nd Santa Cruz did not, in fact, receive the UNIX copyrights in that deal, ra ther it merely received a license to use, develop, and distribute the UNI X technology. See SCO Group, Inc. v. Novell, Inc., 439 F. App’x 688 ( 10th Cir. 2011) (outlinin g this background). When the bankruptcy stay was lifted in this case, the district court here re-opened the case in 2013. B ecause the Novell litigation had estab lished that SCO did not own the copyrights to the UNIX t echnologies, SCO voluntarily di smissed many of its claims against IBM that were predicated upon that faulty assumption. Al l that remained of SCO’s case against IBM were allegations that IBM (1) committed unfair competition by means of misappropriation, and (2) tor tiously interfered with SCO’s business relationships. 12 On February 5, 2016, the district court awarded summary judgment to IBM on the misappropriation claim. In a sepa rate order, on February 8, 2016, the district court also awarded IBM summary judgmen t on the tortious interference claims. SCO brings three issues to this Court fo r appeal: (1) the dist rict court’s summary judgment order on the misappropriation claim; (2) the district court’s separate summary judgment order on the tortious interference clai ms; and (3) the district court’s denial of leave for SCO to add a claim for copyright infring ement after the deadline for amended pleadings. We address th ese issues in turn.

12 Count 6 encompassed the mi sappropriation claim; Counts 7 and 9 represented the remaining claims for to rtious interference.17 II. DISCUSSION A. Misappropriation
1. Applicable Law The parties could not agree on which St ate’s law governs SCO’s misappropriation claim. Instead they have stipulated that either the laws of Utah or New York should control, believing there are no material differen ces in the relevant legal principles. The district court similarly relied on both Utah an d New York law to gro und its analysis of this claim. We cannot, however, analyze th is claim without first deciding which State’s law should govern. The JDA provides: “This Agreement shall be governed by, and the legal relations between the parties hereto shall be determined in accordance with, the substantive laws of the State of New York.” Aplt. App. 3112, JDA § 22.3. Whether SCO’s claim ultimately sounds in contract or tort, this provision ma ndates that “the legal relations between the parties” be adjudicated pursuant to New York law. Id. That phrase is sufficiently broad to encompass a claim by one party of unfair competition based on misappropriation. 13 Thus, we rely on New York substantive law to resolve the propriety of summary judgment on SCO’s misappropriation claim.

13 Moreover, the parties’ consensus that the laws of New York and Utah are materially the same on this issue further confirms that our application of New York law should be acceptable to the parties.18 New York courts recognize “two theori es of common-law unfair competition: palming off and misappropriation.” 14 ITC Ltd. v. Punchgini, Inc., 880 N.E.2d 852, 858 (N.Y. 2007). The gravamen of SC O’s claim is misa ppropriation, which “concerns the taking and use of the plai ntiff’s property to compete against the plaintiff’s own use of the sa me property.” Sidney Frank Importing Co., Inc. v. Beam Inc., 998 F. Supp. 2d 193, 208-9 (S.D.N.Y . 2014) (internal quot ation marks omitted) (interpreting New York law); accord Punchgi ni, 880 N.E.2d at 859. “To state a claim for the misappropriation theory of unfair competition, a plain tiff must allege that the defendant: (1) misappropriated the plain tiff’s labors, skills, expenditures, or goodwill; and (2) displayed some element of bad faith in doing so.” Sidney Frank Importing, 998 F. Supp. 2d at 209 (internal qu otation marks, citations omitted). Tracking these requirements, SCO clai ms that IBM (a) misappropriated the SVr4 code for its own commercial advantag e and (b) exhibited bad faith in doing so by pretending to support Project Monterey and releasing a sham version of the IA-64 Product in order to legitim ize its use of SCO’s code.

14 Relying on an unpublished case from the Second Circuit, SCO argues “the tort of unfair competition is a broad and flexible doctrine that has been described as encompassing any form of commercial immoral ity[.]” Big Vision Private Ltd. v. E.I. du Pont de Nemours & Co., 610 F. App’ x 69, 70 (2d Cir. 2015) (unpublished) (internal quotation marks omitted) (int erpreting New York law). SCO says, therefore, that unfair competition is not limited only to palming off and misappropriation, but is much broader. The interpretation of New York’s highest court, however, controls over that of a fe deral court expressed in an unpublished case. Because New York limits its unfai r-competition tort to palming off and misappropriation, see Punchg ini, 880 N.E.2d at 858, we c onfine our understanding of the tort to those theories alone.19 2. Independent Tort Doctrine The district court granted IBM’s motion for summary judgment after concluding that the “independent tort doctrine” pr ecluded the misappropriation claim. The independent tort doctrine provides that “a si mple breach of contract is not to be considered a tort unless a legal duty independent of the contract itself has been violated.” Clark-Fitzpatrick, Inc. v. Long Island R.R. Co., 516 N.E.2d 190, 193 (N.Y. 1987). This separate duty must “spring from circumst ances extraneous to, and not constituting elements of, the contract , although it may be connected with and dependent upon the

contract .” Id. at 194 (emphasis added). When the plaintiff is “essen tially seeking enforcement of the bargain,” rather than a societal policy or law that gi ves rise to a duty of care, “t he action should proceed under a contract theory.” Sommer v. Fed. Signal Corp., 593 N.E.2d 1365, 1369 (N.Y. 1992); see also Abacus Fed. Savings Bank v. ADT Sec. Servs., Inc., 967 N.E.2d 666 (N.Y. 2012) (finding no separate liab ility in tort when the grav amen of the claim was the defendant’s failure to make good on its promise to offer functional secu rity services that would prevent a bank burglary). In other words, when the defendant has a duty “separate and apart from its contract obligations,” then an action in tort will lie. N.Y. Univ. v. Continental Ins. Co., 662 N.E. 2d 763, 768 (N.Y. 1995) (findi ng no separate liability in tort when the breach of an insurance policy also violat ed New York statutory insurance law because “the provisions of the Insura nce Law are pr operly viewed as measures regulating the insurer’s performance of its cont ractual obligations, . . . not as a legislative imposition of a separate dut y of reasonable care”).20 For this analysis, we focus not on the conduct which might constitute a breach of contract, but instead on the defendant’s duties . As an intermediate New York appellate court helpfully explained: [T]he focus is not . . . on whether the tortious conduct is separate and distinct from the defendants’ breach of contractual duties, for it has long been recognized that liability in tort may arise from a nd be inextricably intertwined with that conduct which also constitutes a breach of contractual obligations. Rather, the focus is on whether a noncontractual duty was violated; a duty imposed on individuals as a matter of social policy , as opposed to those imposed consensually as a matte r of contractual agreement. Apple Records, Inc. v. Capito l Records, Inc., 529 N.Y.S.2d 279, 281-82 (N.Y. App. Div. 1988) (emphasis added) (internal citations om itted). To illustrate, consider a scenario where two parties reach an agreement that one shall not assault the other. If an assault occurs, we would not say that the victim is limited to a breach -of-contract remedy—of course he would also have a cl aim for tortious assault. That is because society imposes a duty not to assault others which is independent of the contractual promise made by the parties. With this in mind, we turn to the misa ppropriation claim here. The district court held that the independent tort doctrine barred SCO’s claim, but in doing so the district court focused too narrowly on IBM’s allege dly wrongful conduct, observing that the same conduct would constitute both an unfai r-competition claim and a breach of the JDA. But that analysis miss es the point. What matters is not whether IBM’s “use of the code” violated the contract, but rather whether IBM violated some separate and independent non-contractual duty in using that code.21 To be sure, the district court devoted some attention to this question, but it restricted its inquiry to whether there existed a fiduciary relationship between the parties, i.e., a joint venture or partnership, giving rise to a heightened duty of care. The JDA clearly provides that “[t]his Agre ement shall not be co nstrued to establish any form of partnership, agency, franchise or joint venture of any kind between SCO and IBM, . . [nor] to provide for any sharing of profits or losses between the parties.” Aplt. App. 3113, JDA § 22.5. So the dist rict court correctly concluded that the parties were dealing with each other at arms’ length and ha d no fiduciary or heightened duty toward one another. But New York does not appear to requi re a heightened duty incident to a partnership or fiduciary re lationship as a predicate to an unfair competition claim— any common-law or statutory duty will suff ice. For example, in Sidney Frank Importing Co., Inc. v. Beam Inc., 998 F. Su pp. 2d at 210, a fe deral court applying New York law permitted a whiskey distri butor to bring a misappropriation claim against its supplier even t hough the supply contr act addressed the wrongful conduct, and there was no specially recognized rela tionship between those two entities other than the fact that they did business together. In another case, Cargill, Inc. v. Sears Petroleum & Transport Corp., 388 F. Supp. 2d 37, 65 (S.D.N.Y. 2005) (interpreting New York law), a misappropr iation claim survived alon gside a breach-of-contract claim when the breached agr eement specifically governed the use of confidentially shared information between th e parties, and the parties ha d not formalized any joint venture between themselves.22 Similarly, in this case, while IB M and SCO may not have had a formal partnership or joint venture as a matter of law, they surely enjoyed a business relationship in which each reposed a degree of trust and confidence in the other. In that situation, there exists a duty not to take a business co llaborator’s property in bad faith and without his consent in order to compete against that owner’s use of the same property. Because th at duty is separate from th e JDA, even though the JDA addresses the same topic, the indepe ndent tort doctrine does not bar SCO’s misappropriation claim. Accordingly, the di strict court’s order cannot be affirmed on this ground.

3. Standing as Assignee of Santa Cruz’s Claim IBM offers alternative reasons to affirm the summary judgment order. It first contends that SCO lacks standing to pursue its misappropriation claim. SCO was not a party to the JDA, rather it was the successo r-in-interest to Santa Cruz’s intellectual property rights. In 2000, Santa Cruz assigne d to SCO all of its “right, title and interest” in the UNIX technologies, Aplt. App. 53 11, including the “rights and privileges pertaining to” the intellectual property, id. at 5312, and all “rights to enforce confidentiality or similar obligations” in relation to the transferred assets, id. The JDA, however, contained a provision limiting Santa Cruz’s assignment power: “[n]either party may assign, or otherwise tran sfer, its rights . . . under this Agreement without the prior written consent of the othe r party.” Aplt. App. 3114, JDA § 22.12.23 Because IBM never gave its prior written cons ent to Santa Cruz’s assignment, it argues that SCO did not validly acquire any right from Santa Cruz to sue for misappropriation. This argument falls flat for two reas ons. First, under New York law, a nonassignment provision that me rely prohibits assignment—and does not expressly declare that such assignments are void or invalid —merely entitles the aggrieved party to damages. See Sullivan v. Int’ l Fidelity Ins. Co., 465 N.Y.S.2d 235, 237-38 (N.Y. App. Div. 1983) (citing cases). Wit hout such a clear and express statement of invalidity of assignments included in the contract, the assignmen t survives and the assignee can enforce the transfe rred rights against the third pa rty. Id. In this case, the JDA merely prohibits assignment wi thout consent—it does not state that nonconsensual assi gnments are void. Second, and more importantly, the non-a ssignment provision here specifically forbids the transference of rights “under th is Agreement.” Aplt. App. 3114, JDA § 22.12. We have already held that SCO’s lawsuit is not to vi ndicate rights under the JDA itself, but is instead to vindicate a tort arising fro m a duty separate and apart from that contract. Accordi ngly, even if this non-assi gnment provision operated to invalidate nonconsensual cont ractual assignments, the assi gnment of rights at issue here is outside the scope of that provision. SCO theref ore has standing to bring its misappropriation claim against IBM as an assignee of Santa Cruz’s rights. 15

15 IBM cites one unpublished federal case, TeeVee Toons, Inc. v. Gerhard Schubert GmbH, No. 00 Civ. 5189, 2006 WL 2463 537 (S.D.N.Y. Aug. 23, 2006), for the proposition that a non-party to a contract l acks standing to sue on the contract. But24 4. Limitations Period IBM next contends that SCO’s misappr opriation claim is untimely under the contractual limitations period. The JDA provided: “Any le gal or other action related to a breach of this Agreement must be commenced no later than two (2) years from the date of the breach . . . .” Aplt. App. 3113, JDA § 22. 3 (emphasis added). At the outset, SCO objects to the application of th is provision to its tort claim which, as earlier discussed, is separa te from the contract. We ma y assume, without deciding, that the contractual language applies not only to breach-o f-contract claims, but also to “[a]ny legal or other action related to a breach” of the JDA. Id. (emphasis added). Even as a separate tort action, there is no question that SCO’ s misappropriation claim is “related to” a breach of the JDA because the JDA expr essly deals with the use of SCO’s licensed materials. We thus apply the two-year limitations period to SCO’s misappropriation claim, which SCO initially filed on March 6, 2003. Nevertheless, SCO complied with the c ontractual limitations period because it filed suit less than two years after its claim accrued. Unde r New York law, “[a] tort claim accrues as soon as the claim becomes enforceable, i. e., when all elements of the tort can be truthfully alleged in a complaint[.]” IDT Corp. v. Morgan Stanley Dean Witter & Co., 907 N.E.2d 268, 273 (N.Y. 2009) (internal quotation marks, citation omitted). Recall that the elements of a misappr opriation claim are that the

TeeVee Toons is materially different from the case before us: it did not involve any assignment or transfer of rights to a third party.25 defendant “(1) misappropriate d the plaintiff’s labors, sk ills, expenditures, or good will[,] and (2) displayed so me element of bad faith in doing so.” Sidney Frank Importing, 998 F. Supp. 2d at 209. SCO’s misappropriation theory is predic ated on the improper inclusion of the SVr4 code in IBM’s AIX for Power product. 16 That claim acc rued when IBM released the AIX for Power operating system containing the SVr4 code on May 4, 2001, which was less than tw o years before SCO filed its complaint. This release was allegedly undertaken in bad faith because IB M attempted to legiti mize its distribution of the SVr4-enhanced AIX product based on a “sham” release of the Monterey operating system made available on a limited ba sis that very same day. (Aplt. Br. 13.) Thus, May 4, 2001, is the date upon whic h “all elements of the tort [could] be truthfully alleged in a co mplaint” against IBM. IDT Corp., 907 N.E.2d at 273 (internal quotation marks omitted). To be sure, IBM included the SVr4 code in a beta test version of AIX for Power in October 2000, but there was not hing improper about that because IBM was expected to take preparatory steps towa rd eventually releasing a functional and publicly available version of its AIX for Power product c ontaining the SVr4 code.

16 SCO’s initial theory of misappropriation was based on IBM’s alleged disclosure of confidential materials, acquired through Pr oject Monterey, to the Linux community in order to make Linux competitive in the enterprise computing market. However, SCO specifically asserts that it only learned of IBM’s impr oper use of the SVr4 code during discovery in this cas e, at which point its theo ry shifted to focus on the improper use of that code, rather than the Linux disclosures.26 SCO’s claim therefore did not accrue at that time. IBM counters that SCO instructed its own expert to calculate damages fo r the misappropriati on claim beginning on October 1, 2000. But we decline to assign that fact any signifi cance, as SCO cannot unilaterally change the claim accrual date any more than IBM can change it—and were SCO to prevail at tria l on this claim, a factfinder could certainly disagree with SCO’s damages calculations. Accordingl y, SCO’s claim for misappropriation based on improper use of the SVr4 code in the AIX for Power product accrued on May 4, 2001, well within the contr actual limitations period.

5. Copyright Preemption IBM argues that SCO’s misappropriati on claim is preempted by federal copyright law. Section 301 of the federal Copyright Ac t provides: “[A]ll legal or equitable rights that are equi valent to any of the exclus ive rights within the general scope of copyright . . . and come within the subject matter of copyright . . . are governed exclusively by” federa l copyright law. 17 U.S.C. § 301(a). In other words, the Copyright Act “preempts a state common la w or statutory claim if: (1) the work is within the scope of the subj ect matter of copyright . . . ; and (2) the rights granted under state law are equivalent to any exclusive rights w ithin the scope of federal copyright . . . .” Harold Stores, Inc. v. Dillard Dep’ t Stores, Inc., 82 F.3d 1533, 1542-43 (10th Cir. 1996) (int ernal quotation marks, citati ons omitted). The parties do not dispute that the SVr4 code at issue here is copyrightable subject matter, see Lexmark Int’l, Inc. v. Static Control Co mponents, Inc., 387 F.3d 522, 533 (6th Cir.27 2004), so we proceed on that assumption. The real battleground is whether SCO’s misappropriation claim is “e quivalent” to any of the exclusive rights granted by federal copyright law. 17 U.S.C. § 301(a). Section 301 “preempts only those state la w rights that may be abridged by an act which, in and of itself, would infri nge one of the exclusive rights provided by federal copyright law.” Ha rolds Stores, 82 F.3d at 1543 (quoting Computer Assocs. Int’l v. Altai, Inc. 982 F.2d 693, 716 (2d Ci r. 1992)). Those exclusive rights include the rights to reproduce the work, prepare derivative works, distribute copies, and perform or display the work publicly. See 17 U.S.C. § 10 6; see also Harolds Stores, 82 F.3d at 1543. Accordingly, “if a state cause of action requires an extra element , beyond mere copying, preparat ion of derivative works, performance, distribution or display, then the state cause of acti on is qualitatively diffe rent from, and not subsumed within, a copyright infringement claim and federal law will not preempt the state action.” Gates Rubber Co. v. Ba ndo Chemical Indus., Lt d., 9 F.3d 823, 847 (10th Cir. 1993) (emphasis added). The dispositive question, then, is whether a misappropriation claim under New York la w has an “extra element” beyond the elements of a federal copyright infringe ment claim. We hold that it does. Misappropriation claims in New York re quire the victim to demonstrate that the defendant acted with bad faith . See, e.g., Schroede r v. Pinterest Inc., 17 N.Y.S.3d 678, 693 (N.Y. App. Div. 2015); Abe’s Rooms, In c. v, Space Hunters, Inc., 833 N.Y.S.2d 138, 140 (N.Y. App. Div. 200 7); Saratoga Vichy Spring Co., Inc. v. Lehman, 625 F.2d 1037, 1044 (2d Cir. 1980) (observing that the “element of bad28 faith” is central to the misa ppropriation theory of unfair competition under New York law); see also 104 N.Y. Jur. 2d Trade Re gulation § 248 (Aug. 2017) (“The gravamen, or essence, of unfair competition unde r New York law is the bad faith misappropriation” of another’s property. (footnotes omitted)). By contrast, federal copyright infringement does not require proof of bad faith. A plaintiff seeking relief fo r federal copyright infringement must prove only that he “owns a valid copyright” and that the defenda nt “copied protectable elements of the copyrighted work.” Paycom Payroll, LLC v. Richison, 758 F.3d 1198, 1204 (10th Cir. 2014) (internal quotati on marks, citation omitted). Because misappropriation under New York law has the extra elemen t of bad faith, SCO’s claim is not “equivalent” to a federal c opyright infringement claim. Accordingly, it is not preempted by the Section 301 of the Copyright Act. 17

17 IBM argues that the district court’s denial of SCO’s attempt to add a copyright infringement claim should be relevant in determining whether the Copyright Act preempts SCO’s misappropriation theory. It is not. The dist rict court precluded amendment of SCO’s complaint for pro cedural reasons—SCO had failed to demonstrate good cause for w hy the copyright claim was not included in the initial complaint. That does not mean that misappropriation under New York law is “equivalent” to a copyright infringement claim for preemption purposes. Nor does SCO’s unsuccessful attempt to amend its complaint prevent SCO from using facts learned during the discovery stage as the basi s for its existing caus es of action, i.e., misappropriation. As explaine d earlier, that is apparently what SCO did here. After it discovered the presence of the SVr4 code in IBM’s AIX for Power product, that discovery became the predominant basis fo r its existing misappropriation claim, displacing its earlier theory of misappropr iation which focused on the confidential materials which IBM allegedly di sclosed to the Linux community.29 B. Tortious Interference
1. Applicable Law The parties have apparently agreed th at Utah law governs SCO’s tortious interference claims. 18 Although the JDA requires that the “legal relations between the parties” are governed by New York law, Aplt. App. 3112, JDA § 22.3, IBM’s alleged intermeddling does not c oncern the legal relations between IBM and SCO. Moreover, SCO’s headquarters and principal place of busin ess is in Utah, so th at is where it suffered the alleged injury. Accordingly, we apply the law from the State of Utah in evaluating SCO’s tortious interference claims. Under Utah law, the elements of tortious interference are: (1) intentional interference with plaintiff’s existing or pote ntial business relationships, (2) the interference is accomplished by improper means , and (3) injury suffered by plaintiff. See Eldridge v. Johndrow, 345 P.3d 553, 556 (Utah 2015). 19 With these elements in mind, SCO offers two theories of tortious inte rference. First, SCO alleges that IBM indirectly interfered with SCO’s business relationships generally in the UNIX-on-Intel market by

18 The district court relied on Utah aut horities, and the parties cite Utah cases throughout their briefs before this Court, as they did in the district court.

19 Before Eldridge v. Johndrow was decided in 2015, Utah courts permitted a plaintiff to prove tortious interference even without improper means, so long as the defendant harbored a predominant improper purpose. See 345 P.3d at 556; see also Anderson Dev. Co. v. Tobias, 116, P.3d 323, 331 (Utah 2005) (“[O]nly one alternative, either improper purpose or improper means, need be established; a plain tiff need not prove both.”). Eldridge changed the law by re pudiating the improper-purpose alternative and requiring improper means to establish a claim for tort ious interference. See 345 P.3d at 565 (“We therefor e conclude that the impr oper-purpose doctrine has not worked well in practice, . . . . It should therefore be ab andoned.” (internal citation omitted)).30 improperly disclosing Santa Cr uz’s proprietary materials to the Linux community, thereby causing SCO’s customer s to prefer Linux over SCO’ s fee-based UNIX platform. Second, SCO claims that IBM directly interfered with SCO’s business relationships by inducing SCO’s affiliates to cut ties with SCO. We address these in turn.

2. Indirect Interference Through Improper Linux Disclosures The district court found that SCO’s theory of indirect interference based on IBM’s Linux disclosures is not acti onable under Utah law. SCO asserts that IBM’s wrongful disclosures of proprietary UNIX materials to the open-source community drove SCO’s potential customers away from its fee-base d products and toward the free Linux alternative, resulting in SCO’s substantia lly diminished sales in the UNIX-on-Intel market. In other words, this theory is predicated upon a defendant’s alleged marketbased activities which may have caused po tential customers to refrain from doing business with the plaintiff. Whether Utah co urts would recognize such a theory as a tortious-interference claim is an unsettled question of state law. “[W]hen an appeal presents an unsettled que stion of state law, we must ordinarily ‘attempt to predict how the highe st court would interpret the issue.’” Belnap v. Iasis Healthcare, 844 F.3d 1272, 1295 (10th Cir. 2017) (alte rations omitted) (quoting Cornhusker Cas. Co. v. Skaj , 786 F.3d 842, 852 (10th Cir. 2015)). “Further, ‘we are generally reticent to expand state law without clear guidance from the highest court.’” Id. (quoting Schrock v. Wyeth, Inc ., 727 F.3d 1273, 12 84 (10th Cir. 2013)). In fact, we have indicated that a party encouraging a federal court to apply a new legal principle under31 state law must make a “strong showing” that the highest court of that state would adopt that principle if presented with the question. Id. at 1295 (“Absent a strong showing to the contrary, we are disinclined to predict th at the Utah Supreme Court would recognize” another theory of estoppel); id. at 1296 (“ And Defendants fail to make such a strong showing.”). With this in mi nd, we turn to Utah law. Utah law clearly embraces a theory of intentional interference based on evidence that potential or prospective customers—rath er than merely existing customers—were driven away by the defendant’s improper interm eddling. See, e.g. Anderson Dev. Co. v. Tobias, 116 P.3d 323, 331 (Utah 2005) (“ A claim for intentional interference with economic relations protects both existing co ntractual relationshi ps and prospective relationships of economic advantage not yet reduced to a formal contract.” (internal quotation marks, citation omitte d)); Leigh Furniture & Carpet Co. v. Isom, 657 P.2d 293, 306 (Utah 1982), overruled on other grounds by Eldridge, 345 P.3d at 553 (“Driving away an individual’s existing or potential cust omers is the archetypica l injury this cause of action was devised to remedy.” (citations omitted)). Furthermore, Utah law does not require that a defendant directly confront the third party to induce that person to cut economic ties with the plainti ff. The Utah Supreme Court’s seminal decision in Leig h Furniture & Carpet Co. v. Isom, illustrates this point. In that case, the defendant committed tortious interferen ce when its representatives frequently visited plaintiff’s “store during business hours to confront him, question him, and make demands and inquiries regarding the manner in which he was conducting his business.” Leigh Furniture, 657 P.2d at 306. These disruptive intrusions “repeatedly32 interrupted sales activities, ca used [plaintiff]’s customers to comment and complain, and more than once caused a customer to leave the store.” Id. Although there was no direct communication between defendant and the thir d-party customers who were driven away from plaintiff’s business, the Utah Suprem e Court nevertheless found this to be actionable interference by the defendant. But SCO’s theory of indire ct interference goes substan tially further than the facts of Leigh Furniture. In this case, IBM’s alle ged improper conduct was directed toward the public and the market generally . The evidence, when construed in SCO’s favor, suggests that IBM improperly disclosed confidential Mont erey materials to a public community of interested software developers who then used those contribu tions to strengthen the opensource Linux platform, which ultimately became a preferab le alternative to SCO’s feebased UNIX product, thereby dimi nishing SCO’s customer base. To be sure, Leigh Furnitu re endorsed a tortious-interference claim based on potential customers who were not directly contacted by the defendant, but it does not follow clearly from Leigh Furniture that any im proper conduct directed toward the public and the general market would be actionable as a claim for to rtious interference whenever a competitor’s business relationships suffer as a result of the improper conduct. That, in effect, would convert almost any claim for il legal market-based activ ities into a tortiousinterference claim, and we find no indicati on in Utah case law that the state supreme court would accept such an expansive interpreta tion. At the very least, because SCO has not cited any controlling case on point, it has failed to make a “strong showing” that the Utah Supreme Court would validate this theory if presented with the issue. Belnap, 84433 F.3d at 1295, 1296. Accordingly, we agree with the di strict court that SCO’s indirectinterference theory is not actionable under Utah law.

3. Direct Interference by Inducing Business Partners to Cut Ties With SCO The district court also granted summary judgment on SCO’s direct-interference theory based on IBM’s alleged efforts to pe rsuade SCO’s business partners and investors to cut ties with SCO. The district court first concluded that, with the exception of IBM’s communications with Hewlett-Packard, ther e was inadequate evid ence to support a finding of direct interferen ce with SCO’s business relations hips. But even the HewlettPackard evidence was not suffici ent because, according to the district court, there was no causal link between IBM’s alleged intermeddlin g with any of the re lationships and SCO’s injury. Further, IBM offers an alternative ground to affirm the decision below: that the evidence does not support even an inference that IBM act ed with improper means, a required element of tortious interference under Utah law. The improper-means requirement “is satisfied where the means us ed to interfere with a party’s economic relations are contrary to law, such as violations of statutes, regulations, or recognized common-law rules. ” Leigh Furniture, 657 P.2d at 308. “Commonly included among improper means are violence, threats or other intimidation, deceit or misrepresentation, bribery, unfo unded litigation, defamation, or disparaging falsehood.” Id. (internal quotation marks, citation omitted). In other words, merely34 persuading another comp any to withdraw its business fr om a competitor is not, without more, an improper means under Utah law. Turning to the facts of this case, we agree with the district court that a jury could find IBM attempted to interfere with SCO’s relationship with Hewl ett-Packard. After SCO announced its Linux licensing strategy, IBM executive Kare n Smith told SCO’s CEO that she was going to encourage partne rs and customers not to do business with SCO. Smith then followed thro ugh with that threat the same day when she suggested to Hewlett-Packard executive Richard Becker that Hewlett-Packard “withdraw all [its] business activities from SCO [.]” Aplt. App. 2352. The other business relationships are a differe nt story. We agree with the district court that there is not enough evidence in th is record to conclude that IBM actually interfered with SCO’s relationships with Oracle, Computer Associates, Intel, and Baystar. 20 There is simply no admissible direct ev idence that IBM ever confronted these companies. To the contrary, executives representing each of these companies stated in a sworn declaration that, to the best of thei r knowledge, IBM never approached them about cutting ties with SCO and that any change in business dealings with SCO was not the

20 SCO did offer some evidence that IBM had attempted to persuade a managing member of Baystar named Lawrence Goldfarb to discontinue Baystar’s investment in SCO. SCO’s chief executive Darl McBrid e submitted a declaration stating that Goldfarb told McBride “that IBM had been ‘on him, on him, on him’ to retract his support from SCO.” Aplt. App. 5586. But that evidence would have been inadmissible hearsay, as it was offered out of court to prove the truth of the matter asserted and SCO has not pointed to any he arsay exception on appeal that would have salvaged the statement from exclusion at trial. Nor can the Court think of an applicable exception. Thus, a jury would not have been entitled to consider this statement so it is not proper to include it in our analysis for the purpose of summary judgment.35 result of IBM’s statements or actions. SCO, for its part, counters that circumstantial evidence should trump these self-serving declar ations, at least enough to create a triable issue of fact. Even if that were true, however, IBM’s alternative argument nevertheless compels us to dispose of all the allegations of di rect interference, including those involving Hewlett-Packard and these other entities. U nder Utah law, “no tortious interference claim can succeed withou t evidence of improper means.” Eldridge, 345 P.3d at 555. That requires that the means be “contrary to law, such as violations of statutes, regulations, or recognized common-law rules. ” Leigh Furniture, 657 P.2d at 308. A competitor’s attempt mere ly to convince third parties not to deal with a plaintiff does not meet this requirement. To confirm that point , the Utah Supreme Court cautioned that the intentional-interference tort ou ght not sweep within its scope “efforts to persuade others not to . . . deal with certain entities” becaus e that would be a legitimate form of thirdparty influence. Id. at 303. Thus, even if we assume that IBM actua lly followed through w ith its threat to persuade industry players not to do bu siness with SCO—as it did with HewlettPackard—that conduct would not have been “improper” with in the meaning of the Utah tort of intentional interference. The dist rict court therefore appropriately granted summary judgment on this claim. 21

21 Because we resolve this claim on th e improper-means requi rement, we do not address the district court’s determination that SCO faile d to demonstrate adequate causation for its injury on summary judgment.36 C. Amendment of Complaint After the deadline for amended pleadings , SCO attempted to add a claim for copyright infringement agains t IBM based on its late discovery of IBM’s allegedly unauthorized distribution of the SVr4 code in the AIX for Power product. 22 The district court denied SCO’s request as untimely and likely to expand the litigation. We review a denial of leave to amend a complaint for abus e of discretion. E.g. Wessel v. City of Albuquerque, 299 F.3d 1186, 1197 (10th Cir. 2002). Under that deferential standard, we affirm the district court’s order on this issue. A brief procedural overview will facilita te the analysis. SCO filed its initial complaint on March 6, 2003, and then timely amended its complaint on July 22, 2003. IBM responded with counterclaims of its own on August 6, 2003, and then timely amended those on September 25, 2003. The dist rict court set a deadline of February 4, 2004 for amended pleadings, but allowed SCO and IBM each to file second amended pleadings on February 27, 2004 an d March 29, 2004, respectively. In March and April 2004, IBM produced al most a million pages of documents and dozens of CDs of source code included in AI X. When SCO reviewed these discovery materials, SCO claims that it learned for the first time that AIX contained the SVr4 code

22 The original complaint contained a cl aim for copyright infringement, but that appears to be based on SCO’s mistaken belie f that it owned the co pyrights to all the UNIX technologies, so any un authorized use of a UNIX variation might have been vulnerable to the copyright ow ner’s challenge. This late r-added copyright claim is based on SCO’s discovery that IBM ha d improperly used SCO’s SVr4 code specifically—a claim that is different from SCO’s mi sappropriation claim because the copyright theory does not depend upon proof of bad faith, wh ile misappropriation does.37 which had been copied from Santa Cruz’s c ontributions to Project Monterey. After analyzing this voluminous document pro duction, SCO sought again to amend its complaint on October 14, 2004 to add a clai m for copyright infringement based on the unauthorized use of the SVr4 code. 23 The federal rules of civil procedure provi de that “[a] schedule may be modified only for good cause and with the judge’s consent.” Fe d. R. Civ. P. 16(b)(4) (emphasis added). Thus, good cause must be show n in order to submit a pleading beyond the deadline set by the district court’s scheduling order, which was February 4, 2004 in this case. Rule 15(a)(2) further indicates that “[ t]he court should freely give leave [to amend pleadings] when justice so requires.” Fed. R. Civ. P. 15(a)(2). Consistent with this rule, we have held that “[t]he pur pose of [Rule 15(a)(2)] is to provide litigants the maximum opportunity for each claim to be decided on its merits rather th an on procedural niceties.” Minter v. Prime Equipment Co., 451 F.3d 1196, 1204 (10th Cir. 2006) (internal quotation marks, citation omitted); accor d 6 Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 1484 (3d ed. 2010). We turn now to the arguments and the district court’s reasoning. In defending its attempt to add a claim after the February 4, 2004 deadline, SCO contended that IBM would not be prejudiced because IBM had alre ady asserted a counterclaim for declaratory

23 It also seems that this la te-stage discovery is the even t that prompted SCO to shift its theory on its existing cause of action fo r misappropriation. As explained earlier, while the initial misappropriation theory was predicated on IBM’s alleged Linux disclosures, SCO’s current mi sappropriation theory is ba sed on the allegedly stolen SVr4 code.38 judgment on SCO’s copyrights. That coun terclaim provided: “IBM does not infringe, induce the infringement of, or contribute to the infringement of any SCO copyright through the reproduction, improvement, and distribution of AIX and Dynix, and that some or all of SCO’s purported copyright s in UNIX are invalid and unenforceable.” 24 Aplt. App. 233. The district court, however, reasoned that IBM’s copyright counterclaim was not intended to encompass literally any SCO copyright, but ra ther it sought a more limited declaration that IBM was not violating SCO’s copyrights to the original UNIX technologies because Santa Cruz never received the UNIX copyrights in the Novell agreement. After all, SCO ha d initially filed a copyright infringement clai m against IBM on that theory, and IBM’s responsive counterclaim should be construed in that context. The district court then reasone d: “Having determined that the [IBM’s] Counterclaim was not intended to sweep so broadly, SCO’s pr oposed amendment is no longer the mirrorimage of IBM’s [copyright] Counterclaim . To permit the proposed amendment would expand this already sizable and complex liti gation and would ser ve only to delay its resolution .” Aplt. App. 1836-37, Dist Ct. Order at 3-4 (emphasis added). Switching course, the district court stated without explanation that SCO had unduly delayed in asserting the proposed cause of action: “It appears that SCO—or its predecessor— either knew or should have known ab out the conduct at issue be fore it filed its original

24 “Dynix” is a reference to the UNIX va riation developed by Sequent, a company that was subsequently merged into IBM.39 Complaint. ” Aplt. App. 1837, Dist. Ct. Order at 4 (emphasis added). For these two reasons, the district court denied SCO’s motion to amend. Notwithstanding the liberal treatment courts ordinarily afford these requests, we cannot say that the district court abused its discretion in finding the absence of “good cause” for the proposed amendm ent. The parties had alre ady modified the scheduling order previously and the litigation was cert ainly sizable and complex at the time. Moreover, while SCO may have genuinely realized the existence of the SVr4 code late in the game, it is not unreasonable to conclude that SCO could have investigated the matter before it filed its original complaint, or at least alleged the claim based on information and belief. 25 Accordingly, we affirm the denial of leave to amend because the district court did not act outside its broad range of discretion.

III. CONCLUSION The district court’s order awardi ng IBM summary judgment on the misappropriation claim is REVERSED, and the matter is REMANDED for further proceedings consistent with this opinion.

25 This is not inconsistent with our earlie r determination regarding SCO’s compliance with the two-year contractual limitations period. We held th at the misappropriation claim, which is based on the allegedly unau thorized use of the SVr4 code acquired through Project Monterey, di d not accrue until May 4, 2001 because that is the date on which IBM released a purportedly “sha m” version of the IA-64 Product to legitimize its use of the SVr4 code in its own AIX fo r Power product released that very same day, thereby satisfying the re quisite element of bad faith under New York law.40 The district court’s order awarding IBM summary judgment on the tortious interference claims is AFFIRMED. The dist rict court’s order denying SCO leave to amend its complaint is also AFFIRMED. 26

26 On August 31, 2016, Appellant filed an “Unopposed Moti on for Permission to File Opening Brief and Appendix Under Seal.” On September 12, 2016, Appellant filed a supplement to that motion entitled “Appellant ’s Supplement to its Unopposed Motion for Permission to File Opening Brief a nd Appendix Under Seal ,” and on September 16, 2016, Appellant filed a second supplement to that motion entitled “Appellant’s Second Supplement to its Unopposed Motion for Permission to File Opening Brief and Appendix Under Seal.” On September 16, 2016, this Court ente red an Order ruling on all three motions, largely denying them. However, as our Orde r makes clear, the matte rs identified in paragraph 4 in “Appellant’s Supplement to its Unopposed Motion for Permission to File Opening Brief and Appendix Under Seal ” filed on September 12, 2016, were to remain “provisionally sealed” subject to a further ruling by the merits panel. Those documents are identified as the following appendix volu mes: 6, 7, 8, 9, 12, 14, 18, 19, 20, 21, 22, 25, 36, 37, 38, 39, 40, 43, 44, 45, 46, 47, 48, 52, 53, 54, 55, 56, 61, 62, 63, 64, and 66. Appellant represents, and Appellee does not oppose, that these materials contain sensitive confidential revenue and profitab ility information, as well as strategic business and marketing plans. All record material relevant to our opinion has been disclo sed in the opinion itself. The Court sees no need to require further public disclosure of these confidential materials. Accordingly, the Court affirms its previous provisional order accepting the materials listed above under seal. This disposes of all open or provisional ru lings pertaining to moti ons to seal in this case.