Michael D. Loprete (MDL1695) CRUMMY, DEL DEO, DOLAN, GRIFFINGER & VECCHIONE, P.C. One Riverfront Plaza Newark, New Jersey 07102 (201) 596-4500 George L. Graff James W. Kennedy Charles B. Ortner VARET MARCUS & FINC P.C. (Formerly MILGRIM THOMAJAN & LEE P.C.) 53 Wall Street New York, New York 10005-2815 (212) 858-5300 Sanford Tannenbaum Executive Vice President and General Counsel UNIX System Laboratories, Inc. 190 River Road Summit, New Jersey 07901-1444 (908) 522-6666 Attorneys for Plaintiff UNIX System Laboratories, Inc. UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY UNIX SYSTEM LABORATORIES, INC., Plaintiff, Civil Action No. 92-1667 (DRD) -against- BERKELEY SOFTWARE DESIGN, INC., and the Following Individuals in their Collective Capacity as THE FIRST AMENDED REGENTS OF THE UNIVERSITY OF CALIFORNIA: COMPLAINT PETE WILSON, LEO T. MCCARTHY, WILLIE L. BROWN, JR., BILL HONIG, DAVID P. GARDENER, RALPH M. OCHOA, GAIL G. ANDERSON, WILLIAM T. BAGLEY, ROY T. BROPHY, CLAIR W. BURGENER, YVONNE BRATHWAITE BURKE, GLENN CAMPBELL, FRANK W. CLARK, JR., DIANA DARNELL, TIRSO DEL JUNCO, ALICE J. GONZALES, JEREMIAH F. HALLISEY, S. SUE JOHNSON, MEREDITH J. KHACHIGIAN, LEO S. KOLLIGIAN, HOWARD H. LEACH, S. STEPHEN NAKASHIMA, YORI WADA, DEAN A. WATKINS, HAROLD M. WILLIAMS, JACQUES S. YEAGER, CARL J. STONEY, JR., PAUL HALL, MARTIN A. TROW and W. ELLIOT BROWNIEE, Defendants. Plaintiff UNIX System Laboratories, Inc. ("USL"), for its First Amended Complaint against Defendant Berkeley Software Design, Inc. ("BSDI") and Defendants Pete Wilson, Leo T. McCarthy, Willie L. Brown, Jr., Bill Honig, David P. Gardner, Ralph M. Ochoa, Gail G. Anderson, William T. Bagley, Roy T. Brophy, Clair W. Burgener, Yvonne Brathwaite Burke, Glenn Campbell, Frank W. Clark, Jr., Diana Darnell, Tirso del Junco, Alice J. Gonzales, Jeremiah F. Hallisey, S. Sue Johnson, Meredith J. Khachigian, Leo S. Kolligian, Howard H. Leach, S. Stephen Nakashima, Yori Wada, Dean A. Watkins, Harold M. Williams, Jacques S. Yeager, Carl J. Stoney, Jr., Paul Hall, Martin A. Trow, and W. Elliot Browniee (collectively, the "Regents"), avers as follows: Nature of The Action 1. This is an action for injunctive relief and damages to redress violations of USL's federal statutory and common law intellectual property and contractual rights in its renowned UNIX computer operating system software and related documentation, such as programmer's manuals distributed to licensees of USL. All references in this First Amended Complaint to UNIX(R) operating system software or source code includes such related documentation. 2.. USL seeks, among other things, to preliminarily and permanently enjoin the Regents and BSDI, a commercial enterprise founded by, among others, current and former University of California personnel, from developing, promoting, reproducing, and distributing computer software products which are based upon, copied from, or derived from USL's proprietary and copyrighted UNIX operating system software, except as authorized by agreements between the Regents and USL or its predecessor, the American Telephone and Telegraph Company ("AT&T") (sometimes, collectively, "USL"). 3.. The computer operating system software involved in this action is written in a human readable form known as source code. Over the past two decades, USL has disclosed in confidence to the Regents of the University of California various editions of its proprietary and original UNIX(R) operating system source code pursuant to licenses that restrict the Regents to educational and administrative use of such software and which limit distribution of derivative works prepared by the Regents to authorized licensees of UNIX(R) system source code. 4.. In contravention of these license agreements, the Regents have permitted the Computer Sciences Research Group of the University of California ("CSRG"), a group established by the Regents ostensibly to engage in research, to widely distribute to persons who are not authorized licensees of USL, computer operating system software known as "Networking Release 2" which was substantially copied, based upon or derived from the UNIX(R) system source code. 5.. BSDI, in turn, has used the Networking Release 2 software as a primary source for the development of a commercial computer operating system, known as "BSD/386 Source," which it has been publicly distributing in a preliminary "beta" version and is preparing to release in a production "gamma" version. 6.. Substantial portions of the source code embodied in the Networking Release 2 software and its BSDI derivative, BSD/386 Source, are based upon, substantially copied from or derived from original UNIX(R) system source code disclosed in confidence to the Regents under restrictive license agreements. 7.. The development and distribution of Networking Release 2 software and its commercial BSD/386 Source derivative is the direct result of an illicit scheme on the part of the founding shareholders of BSDI to achieve financial gain by exploiting their access to CSRG's resources -- including CSRG's limited right to use proprietary UNIX operating system software for educational and administrative purposes -- to develop computer operating system software for commercial sale and distribution by BSDI, in violation of USL's proprietary rights in the UNIX(R) operating system. 8.. By reason of CSRG's development and distribution of the Networking Release 2 software the Regents have breached their obligations under their UNIX(R) software license agreements with USL and have engaged in federal copyright infringement and misappropriation of trade secrets. The Regents have also engaged in false advertising and unfair competition in violation of the federal Lanham Trademark Act, 15 U.S.C. 1051, et seq., and applicable State laws by permitting CSRG to distribute promotional materials which falsely represent that its Networking Release 2 software is "free" of UNIX(R) software code. 9.. BSDI has unlawfully interfered with USL's contractual relations with the Regents by inducing CSRG to breach the Regents' contractual obligations to USL. Moreover, BSDI's development and distribution of its BSD/386 Source product constitutes federal copyright infringement and misappropriation of trade secrets on the part of BSDI. In addition, BSDI has violated the federal Lanham Trademark Act and engaged in unfair competition by distributing brochures and other promotional materials which falsely represent that the BSD/386 Source product does not contain any UNIX(R) operating system source code and that purchasers of the BSD/386 Source product are not required to secure a license from USL. BSDI has repeated these false statements in press release [sic] which also disparage USL. 10. In its original Complaint, USL also sought injunctive relief and damages to redress BSDI's unauthorized use of the UNIX(R) trademark in BSDI's toll-free telephone number, 1-800-ITS UNIX. Although the claim for injunctive relief was resolved by the entry, on April 29, 1992, of a Stipulated Order permanently enjoining BSDI's use of the UNIX(R) mark to identify its telephone number, USL is still seeking damages as a result of BSDI's said unauthorized use of the UNIX mark. Jurisdiction and Venue 11. This Court has subject matter jurisdiction over this action pursuant to 15 U.S.C. 1121(a), 28 U.S.C. 1331 and 1338, 28 U.S.C. 1332, and principles of supplemental jurisdiction. The amount in controversy exceeds $50,000 exclusive of interest and costs. 12. Venue is proper in this district pursuant to 28 U.S.C. 1391(b). The Parties 13. Plaintiff USL is a Delaware corporation with its principal place of business located in Summit, New Jersey. USL is a majority-owned subsidiary of AT&T engaged in the development, manufacture, licensing and sale of computer software operating systems and related products and services. 14. Defendant BSDI is a Delaware corporation engaged in the manufacture and sale of computer software operating systems and related services. BSDI's principal place of business is located in Richmond Falls [sic], Virginia. 15. BSDI has attempted to market and has distributed its BSD/386 Source product and promotional materials relating thereto in New Jersey and elsewhere throughout the world. 16. Each of the individual defendants is a California resident serving as a member of the Board of Regents of the University of California. The Board of Regents, a licensee of UNIX(R) operating system software, is responsible for governing the affairs of the University and each of its members is legally responsible for the conduct of the University and CSRG. 17. The Regents, through CSRG, have distributed Networking Release 2 software and promotional material relating thereto to persons in New Jersey and elsewhere throughout the world. USL's Proprietary Rights in the UNIX Operating System 18. Beginning in the early 1970s, AT&T's Bell Laboratories developed original proprietary computer operating system software and other computer related products which it identified with the trademark "UNIX." 19. A computer operating system is a software program that controls computer processing; allocates internal and external resources; communicates with external devices such as disk drives, keyboards and printers; and provides the interface to and controls the processing of programs designed to perform specific tasks (called "application programs"). In addition to these basic functions, the UNIX operating system contains a host of utilities to assist users, administrators and programmers of UNIX(R) operating system installations. In addition to these basic functions [sic], the UNIX(R) operating system is a highly sophisticated multi-user system (i.e., it allocates the computer's resources among multiple users at the same time) and multi-tasking system (i.e., it can perform more than one task at a time for each user). 20. The UNIX(R) system has been described as "the only major operating system available today that covers almost the entire spectrum of computer classes . . . including microcomputers, minicomputers, mainframes, RISC systems, fault- tolerant computers, and parallel processors." 21. On May 3, 1990, AT&T assigned to USL all of its rights in the UNIX(R) operating system, including the UNIX trademark, its accompanying goodwill and its copyrights and other intellectual property rights in the software and related documentation sold and licensed thereunder. Copyright 22. The source code and object code for the UNIX(R) operating system software and all versions and releases thereof are original unpublished works of authorship created by USL and constitute copyrightable matter under the Copyright Law of the United States, 17 U.S.C. 101 et seq. (the "Copyright Act"). 23. USL has duly complied with all of the provisions of the Copyright Act and has received from the Register of Copyrights Certificates of Registration for, inter alia, the following versions of UNIX(R) operating system software and related documentation (collectively, the "Works"): Works Registration No. Fifth edition TXU 510 028 Sixth edition TXU 511 236 Seventh edition TXU 516 705 32V TXU 516 704 Copies of these Certificates are attached as Exhibits A through D. These registrations constitute prima facie evidence of the validity of these copyrights and of the facts stated in the Certificates. Trademark 24. On May 6, 1986, AT&T's UNIX trademark was duly placed on the Principal Register of the United States Patent and Trademark Office for computer programs, under Registration No. 1,392,203. A copy of the registration is annexed as Exhibit E. This registration is valid, subsisting, in full force and effect, and is now incontestable pursuant to 15 U.S.C. 1065. 25. For more than fifteen years, AT&T and its successor, USL, have widely used the trademark UNIX to identify their system software, computers and related products and services, including educational and training services, system manuals, and technical and consulting services. 26. The trademark UNIX is widely known as identifying AT&T and USL as the source of UNIX(R) operating system software and authorized derivatives thereof and of related products. Trade Secrets and Confidential Information 27. Significant elements of the UNIX(R) operating system source code, including the methods and concepts utilized therein, constitute matter that derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use. 28. In order to protect and preserve its value, USL has treated the UNIX operating system software and the methods and concepts used therein as trade secrets and has taken measures that are reasonable under the circumstances to maintain such secrecy. Disclosure of the UNIX(R) Operating System Software To the Regents in Confidence 29. AT&T initially developed the UNIX(R) operating system for its own internal use. In 1973, AT&T began to license UNIX operating system source code to universities and institutions of higher education, including the Regents, under license agreements that limit the use of such software solely for authorized administrative and educational purposes. 30. As part of the measures employed by AT&T and USL to preserve USL's trade secrets, these license agreements require the licensee to maintain the UNIX(R) System source code in confidence, restrict the licensee from disclosing such source code and the methods and concepts therein, and contain other restrictions intended to protect and preserve USL's proprietary rights in the UNIX operating system. A copy of one such agreement between AT&T's subsidiary, Western Electric Company, Inc. (hereafter, "USL"), and the Regents, dated April 1, 1979, pertaining to software for the UNIX/32V Time-Sharing System, Version 1.0 (the "32V Software Agreement"), is annexed as Exhibit F. 31. Under the 32V Software Agreement and similar license agreements, the Regents have been authorized to distribute to third parties works that are derived from UNIX(R) system software. However, the agreements permit distribution of such derivative work only to persons who have acquired a UNIX(R) system source code license from AT&T or USL. 32. Pursuant to these provisions, the Regents, through CSRG, have developed and distributed derivative works, which are generally known as "Berkeley Software Distributions," to licensees of AT&T and USL. These works have been generally known by a version number followed by the initials "BSD" (e.g., "4.3BSD"). 33. All versions of the BSD software released for distribution by the Regents prior to June 1991, up to and including 4.3BSD, were admittedly derived from UNIX(R) system software. Upon information and belief, the Regents limited distribution of such software to licensees of AT&T and USL. The Infringement of USL's Proprietary Right 34. BSDI is a closely held company formed May 21, 1991, by several persons including employees at CSRG who were and continue to be involved in the development of past, current and future editions of CSRG's "BSD" software. BSDI's shareholders and directors had access to unpublished original proprietary UNIX(R) system source code disclosed in confidence to the Regents under restrictive license agreements and the various "BSD" releases which were substantially copied and derived therefrom, and they also had knowledge of the restrictions contained in those licenses. 35. Some time in 1990, the individuals who eventually formed BSDI formed the collective intention to use the resources of CSRG, including its confidential access to unpublished original proprietary UNIX(R) software and the BSD releases derived therefrom, to develop a commercial computer operating system in direct competition with USL. 36. As part of that plan, the involved CSRG employees induced the Regents to publicly distribute a substantial portion of the software which had previously been released only to AT&T licensees. 37. On or about June 28, 1991, the Regents -- at the behest of BSDI's founders -- commenced the distribution by CSRG of the Networking Release 2 software. In a June 28, 1991 statement announcing the release of its Networking Release 2 software (an excerpt of which is annexed as Exhibit G), CSRG stated that "[t]his software is copyrighted by the University of California and others, but may be freely distributed. It is available to anyone and requires no previous license, either from AT&T or The Regents of the University of California." 38. Substantial portions of the Networking Release 2 software are based upon, substantially copied from, or derived from proprietary UNIX(R) system software, including UNIX/32V software, disclosed to the Regents under restrictive licensee agreements. 39. BSDI is not affiliated with the Regents, nor has it entered into any license agreements with USL pertaining to UNIX brand software, computers or related products. Accordingly, BSDI is not authorized to receive, use, reproduce, disclose or distribute software containing UNIX(R) system source code or works derived therefrom. Nor is BSDI authorized to use the UNIX(R) mark to identify its products or services. 40. BSDI is attempting to develop its BSD/386 Source software as a computer operating system software product that is directly competitive to products sold or licensed by USL and/or its licensees. Exhibit H is a copy of a BSDI promotional brochure for its BSD/386 Source product. 41. BSDI's BSD/386 Source product is admittedly derived from the Networking Release 2 software. As such, the BSD/386 Source product is based upon, substantially copied from or derived from UNIX(R) system software or derivative works therefrom. Wholly apart from its reliance on the Networking Release 2 software, BSDI has added to its BSD/386 Source product source code that is based upon, substantially copied from or derived from UNIX(R) system software or derivative works therefrom. First Claim for Relief Breach of Contract (Against the Regents) 42. Plaintiff incorporates the foregoing allegations of the Complaint. 43. Under the 32V Software Agreement and similar licenses, USL granted the Regents a royalty-free, personal, nontransferable and nonexclusive right to use the Licensed Software "solely for 'academic, educational and administrative purposes'", solely on designated central processing units, or "CPUs". The agreement further provides that: Uses for "academic and educational purposes" means uses directly related to teaching and degree-granting programs. Such uses exclude, without limitation, administrative uses, commercial uses such as the development of software for sale or license, or uses in research if any third person is granted rights or preferential access to the fruits of such research. Other agreements extended to the Regents the right to use the licensed software for the internal administration and operation of the University. 44. Under all of its agreements with AT&T relating to the UNIX(R) software, the Regents agreed, among other things, "to hold the LICENSED SOFTWARE in confidence" and "not [to] make any disclosure of the LICENSED SOFTWARE or any portion thereof (including methods or concepts utilized therein) to anyone, except to employees or students" in accordance with the terms of the agreement. 45. Under all of its agreements with AT&T relating to the UNIX(R) software, the Regents further agreed, among other things, that "it will not use the LICENSED SOFTWARE except as authorized herein, that it will not make or have made, or permit to be made, any copies of the LICENSED SOFTWARE, except those copies which are necessary to the use, by [the Regents], for which rights are granted hereunder . . . ." 46. Certain agreements between AT&T and the Regents expressly authorized the Regents to distribute its own version of the UNIX(R) software "to other licensees of [AT&T] for UNIX(R) System V, provided that [the Regents] first verifies the status of any such other license in accordance with specific instructions issued by AT&T." 47. The Regents have breached the 32V Software Agreement and other license agreements by, among other things, (a) disclosing portions of the UNIX(R) operating system source code, and the methods or concepts used therein, to persons and for purposes other then those authorized in its license agreements with AT&T; (b) distributing its version of the UNIX(R) software to persons who were not licensed by AT&T or USL and without verifying the status of such persons in accordance with AT&T or USL's instructions; and (c) using UNIX(R) system source code for purposes not authorized under the agreements. 48. The agreements between AT&T and the Regents each provide that "[i]f the [Regents] shall fail to fulfill one or more of its obligations under this agreement, [AT&T] may, upon its election and in addition to any other remedies it may have, at any time terminate all the rights granted by it hereunder by not less than two (2) months' written notice to the [Regents] specifying any such breach, unless within the period of such notice all such breaches specified therein shall have been remedied; upon such termination [the Regents] shall within thirty (30) days deliver to [USL] all documentation containing the LICENSED SOFTWARE, and shall render unusable all LICENSED SOFTWARE placed in any storage apparatus." 49. The Regents have "failed to fulfill one or more of its obligations" as contemplated by the Termination provisions of the 32 [sic] Software Agreement and the other license agreements. 50. By reason of their breach of contract, the Regents have caused, and unless enjoined, will continue to cause irreparable injury to USL for which there is no adequate remedy at law. 51. The Regents have caused damage to USL's business in an amount to be determined at trial. Second Claim for Relief Inducing Breach of Contract (Against BSDI) 52. Plaintiff incorporates the foregoing allegation of the Complaint. 53. At all relevant times, BSDI knew that USL had disclosed its UNIX(R) operating system software to the Regents pursuant to license agreements that limited the use of such software or derivatives thereof to administrative and educational purposes, limited disclosure of such software and the methods or concepts utilized therein and limited distribution of the Regent's [sic] version of such software to persons holding a UNIX(R) system source code license from USL or AT&T. 54. At all relevant times, BSDI knew that Networking Release 2, from which the BSD/386 Source software product is admittedly derived, was substantially copied from, derived from and based upon proprietary UNIX(R) operating system software and the methods and concepts utilized therein, and that the Regents had a duty not to disclose Networking Release 2 to persons who were not licensees of USL or AT&T. 55. BSDI intentionally and unjustifiably induced the Regents, through CSRG, to breach the 32V Software Agreement and similar license agreements by, among other things, (a) distributing Networking Release 2 to persons who are not authorized to receive UNIX(R) system software or works derived therefrom, (b) making copies of Networking Release 2 and permitting copies of such software to be made and distributed by persons who are not authorized to receive UNIX(R) system software or works derived therefrom, and (c) using the licensed software for purposes not authorized under the agreement. 56. By reason of the foregoing, BSDI has damaged USL's rights in the UNIX(R) operating system software in an amount to be determined at trial. Third Claim for Relief Federal Copyright Infringement (Against BSDI and the Regents, Severally) 57. Plaintiff incorporates the foregoing allegations of the Complaint. 58. BSDI and the Regents have without the permission of AT&T or USL, reproduced, prepared derivative works based upon, and distributed copies of copyrighted UNIX(R) operating system source code, including UNIX(R) operating system 32V, and works derived therefrom. 59. BSDI and the Regents have engaged in copyright infringement in violation of the Copyright Act. 60. BSDI's and the Regents' infringement of USL's copyrights has caused, and unless enjoined, will continue to cause irreparable injury to USL for which there is no adequate remedy at law. 61. BSDI and the Regents have caused damage to USL's business in an amount to be determined at trial. Fourth Claim for Relief Misappropriation of Trade Secrets and Confidential Information (Against BSDI and the Regents, Severally) 62. Plaintiff incorporates the foregoing allegations of the Complaint. 63. Substantial portions of the source code embodied in or constituting the Networking Release 2 software and the BSD/386 Source product are based upon or derived from proprietary UNIX(R) operating system software and the methods and concepts utilized therein. 64. At all relevant times, BSDI knew or reasonably should have known that Networking Release 2, from which the BSD/386 Source software product is admittedly derived, was derived from and based upon proprietary UNIX(R) operating system software and the methods and concepts utilized therein and that the Regents had a duty not to disclose Networking Release 2 to persons who were not licensees of USL or AT&T. 65. The conduct of BSDI and the Regents constitutes misappropriation of USL's trade secrets and confidential information, in violation of applicable State law. 66. BSDI and the Regents have caused, and unless enjoined, will continue to cause irreparable injury to USL for which there is no adequate remedy at law. 67. BSDI and the Regents have caused damage to USL's business in an amount to be determined at trial. Fifth Claim for Relief False or Misleading Representations of Fact in violation of the Lanham Trademark Act (Against BSDI) 68. Plaintiff incorporates the foregoing allegations of the Complaint. 69. As shown in Exhibit H, BSDI's promotional materials contain the following representations concerning its "BSD/386" system: BSD/386 is a "Berkeley UNIX" compatible operating system for the 386 and 486 PC architectures. It is based on the most recent release from the Computer Systems Research Group of the University of California, Berkeley - the Networking Release 2. The NET2 tape contained no AT&T licensed code, but was not a complete system. BSDI has completed the system and added additional drivers. The resulting system does not require a license from AT&T, and so is available in source form at a fraction of AT&T's price. 70. This statement is materially false and misleading in that, among other things: (a) the "Networking Release 2 software referred to therein contains source code that was substantially copied from, based upon, or derived from, UNIX(R) operating system source code licensed to the Regents by AT&T, (b) the "Networking Release 2" software and any works derived therefrom may only be lawfully distributed to UNIX operating system "source code" licensees of AT&T or USL, (c) the BSD/386 Source software contains additional source code, not included in the Networking Release 2 software, which is substantially copied from, based upon, or derived from, UNIX operating system source code; and (d) the BSD/386 Source source code may only be lawfully distributed to UNIX(R) operating system "source code" licensees of USL or AT&T. 71. In the License Agreement by which BSDI sells its BSD/386 software product to consumers, BSDI represents that "THE LICENSED PROGRAM DOES NOT CONTAIN CODE FROM AT&T'S UNIX OPERATING SYSTEM CURRENTLY LICENSED BY UNIX SYSTEMS [sic] LABORATORIES." A copy of BSDI's form of License Agreement is attached as Exhibit I. 72. This statement is likewise materially false and misleading in that, among other things, the BSDI "LICENSED PROGRAM" contains software source code that was copied from, based upon, or derived from, UNIX(R) operating system source code licensed to the Regents by AT&T and may only be lawfully distributed to UNIX operating system "source code" licensees of AT&T or USL. 73. BSDI has repeated these false and misleading statements in press releases that disparage USL, its business and the UNIX trademark. Copies of two press releases printed on BSDI letterhead are attached as Exhibit J. 74. BSDI's conduct constitutes the use in commerce, in connection with goods or services, of false or misleading descriptions of fact or false or misleading representations of fact in commercial advertising or promotion which misrepresent the nature, characteristics or qualities of BSDI's goods, services or commercial activities. 75. BSDI has caused, and unless enjoined, will continue to cause irreparable injury to USL for which there is no adequate remedy at law. 76. BSDI has caused USL to sustain damage to its business, and to the value of its trademark and the goodwill associated with that mark. 77. BSDI's conduct constitutes false or misleading representations of fact in violation of Section 43(a) of the Lanham Trademark Act, 15 U.S.C. [section] 1125. Sixth Claim for Relief False or Misleading Representations of Fact in Violation of the Lanham Trademark Act (Against the Regents) 78. Plaintiff incorporates the foregoing allegations of the Complaint. 79. The Regents's June 28, 1991 announcement that its Networking Release 2 software is "available to anyone and requires no previous license, either from AT&T or The Regents of the University of California" is materially false and misleading in that, among other things, the "Networking Release 2" referred to therein contains software code that was substantially copied from, based upon, or derived from, code licensed to the Regents by AT&T and that "Networking Release 2" and any works derived therefrom may only be lawfully distributed to licensees of AT&T or USL. 80. The Regents' conduct constitutes the use in commerce, in connection with goods or services, of false or misleading descriptions of fact or false or misleading representations of fact in commercial advertising or promotion which misrepresent the nature, characteristics or qualities of BSDI's goods, services or commercial activities. 81. The Regents have caused, and unless enjoined, will continue to cause irreparable injury to USL for which there is no adequate remedy at law. 82. The Regents have caused USL to sustain damage to its business. 83. The Regents' conduct constitutes false or misleading representations of fact in violation of Section 43(a) of the Lanham Trademark Act, 15 U.S.C. [section] 1125. Seventh Claim for Relief False Descriptions of Origin in Violation of the Lanham Trademark Act (Against BSDI) 84. Plaintiff incorporates the foregoing allegations of the Complaint. 85. Statements contained in BSDI's product brochures, promotional materials, licenses and press releases falsely represent or imply that the source code embodied in BSD/386 Source product originates with BSDI and the Regents, and not with AT&T or USL. 86. Likewise, the copyright notice affixed by BSDI to its BSD/386 Source product falsely represents or implies that the source code embodied in that product originates with BSDI and the Regents, and not with AT&T or USL. 87. BSDI's conduct constitutes the use in commerce, in connection with goods or services, of a false designation of origin which is likely to cause confusion, or to cause mistake, or to deceive as to the origin of the source code embodied in the BSD/386 Source product. 88. BSDI has caused, and unless enjoined, will continue to cause irreparable injury to USL for which there is no adequate remedy at law. 89. BSDI has caused USL to sustain damage to its business. 90. BSDI's conduct constitutes false designations of origin in violation of Section 43(a) of the Lanham Trademark Act, 15 U.S.C. 1125. Eighth CLaim for Relief False Description of Origin in Violation of the Lanham Trademark Act (Against the Regents) 91. Plaintiff incorporates the foregoing allegations of the Complaint. 92. Statements made by the Regents in promotional materials, and the copyright notice affixed by the Regents to its Networking Release 2 software, falsely represent or imply that the source code embodied in the Networking Release 2 software originates with CSRG, and not with AT&T or USL. 93. The Regents' conduct constitutes the use in commerce, in connection with goods or services, of a false designation of origin which is likely to cause confusion, or to cause mistake, or to deceive as to the origin of the source code embodied in the Networking Release 2 software. 94. The Regents have caused, and unless enjoined, will continue to cause irreparable injury to USL for which there is no adequate remedy at law. 95. The Regents have caused USL to sustain damage to its business. 96. The Regents' conduct constitutes false designations of origin in violation of Section 43(a) of the Lanham Trademark Act, 15 U.S.C. 1125. Ninth Claim for Relief Federal Trademark Infringement (Against BSDI) 97. Some time prior to January 1992, BSDI acquired a toll-free telephone number that would permit someone to contact BSDI by dialing "1-800-ITS-UNIX". 98. BSDI included the "ITS-UNIX" telephone number in its advertising and promotional materials and has otherwise used the UNIX trademark in connection with the sale, distribution or advertising of its goods and/or services in commerce. 99. BSDI's use of the "ITS-UNIX" telephone number is intended to and likely to cause confusion, or to cause mistake, or to deceive in that BSD/386 is not a "UNIX" product nor is BSDI authorized or licensed to use the UNIX trademark in connection with any of its products or services. 100. On April 29, 1992, this Court entered a Stipulated Order, dated April 28, 1992, that permanently enjoins BSDI's use of the UNIX mark in connection with its telephone number. However, such Order is without prejudice to USL's right to seek damages based upon BSDI's use of the UNIX trademark. 101. BSDI's unauthorized use of the UNIX trademark has caused USL to sustain damage to its business, and to the value of its trademark and the goodwill associated with that mark. 102. BSDI's conduct constitutes infringement of a registered trademark in violation of Section 32 of the Lanham Trademark Act, 15 U.S.C. 1114. Tenth Claim for Relief Dilution (Against BSDI) 103. Plaintiff incorporates the foregoing allegations of this Complaint. 104. BSDI's conduct threatens to and does impair the distinctive significance of the UNIX mark, in violation of USL's rights under the common law of New Jersey and under the law of each State in which BSDI has engaged, is engaging or threatens to engage in the aforesaid conduct. Eleventh Claim for Relief Unfair Competition and Deceptive Trade Practices under State Statutory and Common Law (Against BSDI) 105. Plaintiff repeats the foregoing allegations as if fully set forth herein. 106. BSDI's conduct constitutes unfair competition and deceptive trade practices in violation of applicable statutory and common law. WHEREFORE, USL demands judgment as follows: 1. A preliminary and permanent injunction: (a) restraining BSDI, its officers, agents, employees, servants, and all persons in active concert or participation with them, from developing, manufacturing, offering for license or sale, licensing, selling, displaying, distributing, promoting, disclosing or using, (1) its BSD/386 Source product or any derivatives thereof and (2) any other software product which, in whole or in part, is copied from, based upon, or derived from UNIX(R) operating system software, version 32V or from any other UNIX(R) operating system software. (b) directing BSDI, its officers, agents, employees, servants, and all persons in active concert or participation with them, (1) to collect and surrender up to counsel for USL all copies, including copies stored on hard disc, tape drives or in any other storage medium, of matter copied from, based upon, or derived from any portion of the UNIX(R) operating system software source code in its possession, custody or control and (2) in the presence of representatives of USL and under the supervision of the Court, to render unusable all matter containing, copied from, based upon or derived from, in whole or in part, any portion of the UNIX operating system software source code in all storage apparatuses in their possession, custody of [sic] control. (c) restraining BSDI, its officers, agents, employees, servants, and all persons in active concert or participation with them, from referring to, consulting, copying, duplicating, or relying on or otherwise using UNIX(R) operating system software or any works, notes, memoranda, or other records, copied from, based upon, or derived from such software, in connection with the development of any computer operating system. (d) restraining BSDI, its officers, agents, employees, servants, and all persons in active concert or participation with them, from employing, authorizing or otherwise allowing any person who has had access to UNIX(R) operating system source code or any works, notes, memoranda, or other records, copied from, based upon, or derived from such software, disclosed to such person or his employer in confidence, to participate on behalf of BSDI in the development of source code for a multiuser computer operating system. (e) restraining BSDI, its officers, agents, employees, servants, and all persons in active concert or participation with them, from authorizing or purporting to authorize any person to engage in any of the foregoing actions. (f) directing BSDI, its officers, agents, employees, servants, and all persons in active concert or participation with them, to recall all copies of the BSD/386 Source software that were previously distributed and to notify actual and possible recipients of such software of this Court's order and the finding on which it is based. 2. A preliminary and permanent injunction: (a) restraining the Regents, and each of them, and all officers, agents, employees and servants of the University of California, and all persons in active concert or participation with them, from using, developing, manufacturing, offering for license or sale, licensing, selling, displaying, disclosing, distributing or promoting (1) the Networking Release 2 software, (2) the BSD software releases, (3) the UNIX operating system software and (4) any other software which, in whole or in part, is copied from, based upon, or derived from UNIX(R) operating system software, version 32V or from any other UNIX(R) operating system software, except as authorized by the agreements between the Regents and USL or AT&T. (b) restraining the Regents, and each of them, and all officers, agents, employees and servants of the University of California, and all persons in active concert or participation with them, from authorizing or purporting to authorize any person to engage in any of the foregoing actions. (c) directing the Regents and each of them, and all officers, agents, employees and servants of the University of California, and all persons in active concert or participation with them, to recall all copies of the Networking Release 2 software that were previously distributed and to notify actual and possible recipients of such software of this Court's order and the findings on which it is based. 3. An award against BSDI and the Regents and each of them of all forms of monetary relief authorized by Section 504 of the Copyright Act including but not limited to USL's actual damages and/or the profits of BSDI which are attributable to the infringement in an amount to be determined at trial. 4. An award of compensatory damages against BSDI and the Regents and each of them. 5. An award of punitive damages against BSDI in an amount to be determined at trial. 6. An accounting and disgorgement of BSDI's profits derived as a result of its wrongful acts or such other amount as the court shall find to be just according to the circumstances of the case. 7. An award against BSDI, the Regents and each of them, of attorneys fees and expenses incurred by USL, to the full extent permitted by law. 8. Such other and further relief as this Court may deem just and proper. Dated: Newark, New Jersey July 24, 1992 CRUMMY, DEL DEO, DOLAN, GRIFFINGER & VECCHIONE, P.C. By: (signed Mich Mxtx) Michael D. Loprete (MDL1695) One Riverfront Plaza Newark, New Jersey 07102 (201) 596-4500 and VARET MARCUS & FINK P.C. (Formerly MILGRIM THOMAJAN & LEE P.C.) By: (signed James W. Kennedy) George L. Graff James W. Kennedy Charles B. Ortner 53 Wall Street New York, New York 10005-2815 (212) 858-5300 Attorneys for Plaintiff UNIX System Laboratories, Inc. Of Counsel: Sanford Tannenbaum Executive Vice President and General Counsel UNIX System Laboratories, Inc. 190 River Road Summit, New Jersey 07901-1444 (908) 522-6666 h:\jwk\unix\regents4