That Linux lawsuit: 20 years later, SCO vs IBM may finally be ending

The SCO vs. IBM lawsuit that was once seen as an existential threat to Linux became a bad legal joke. Now the suit may finally be put to rest. Well, some of it anyway.
Written by Steven Vaughan-Nichols, Senior Contributing Editor

Today, many Linux users would be shocked to know that there was once a lawsuit aimed squarely at Linux's heart: Its intellectual property. Some people at the time even thought SCO's lawsuit against IBM might end Linux. They were wrong. But, for years the case dragged its way through the courts. Now, one part of that case may really and truly be disappearing.

The US Bankruptcy Court for the District of Delaware, which has been overseeing the slow and painful bankruptcy of the remains of SCO, announced that the TSG Group, which represents SCO's debtors, has settled with IBM and resolved all the remaining claims between TSG and IBM "Under the Settlement Agreement, the Parties have agreed to resolve all disputes between them for a payment to the Trustee [TLD], on behalf of the Estates [IBM], of $14,250,000."

In return, TLD gives up all rights and interests in all litigation claims pending or that may be asserted in the future against IBM and Red Hat, and any allegations that Linux violates SCO's Unix or Unixware intellectual property. 

Why is TLD, the former SCO, finally agreeing to let this drop. Because, as some of us knew 18 years ago, they never had a case. Or, as TLD's legal representative, Blank Rome bankruptcy attorney Stanley B. Tarr, put it in a motion, "succeeding on the unfair competition claims will require proving to a jury that events occurring many years ago constituted unfair competition and caused SCO harm. Even if SCO were to succeed in that effort, the amount of damages it would recover is uncertain and could be significantly less than provided by the Settlement Agreement."

You think? 

After all, Tarr continued:

...a jury would have to find that (1) the amount of damage SCO sustained as a result of IBM's conduct is less than SCO has alleged, (2) SCO's damages are limited by a $5 million damage limitation provision in the Project Monterey agreement, or (3) some or all of IBM's Counterclaims, alleging millions of dollars in damages related to IBM's Linux activities and alleged interference by SCO, are meritorious.

That's not going to happen.

So is this it? No. I wish. There's an entirely separate lawsuit keeping the issue alive. 

Xinuos, which bought SCO's Unix products and intellectual property (IP) in 2011, like a bad zombie movie, is suing IBM and Red Hat for "illegally Copying Xinuos' software code for its server operating systems." 

The story here is that Xinuos bought SCO Unix operating systems. These operating systems, OpenServer and Unixware, still have a minute, but real market. When Xinuos made the deal, its CEO, Richard A. Bolandz, promised that the company "has no intention to pursue any litigation related to the SCO Group assets acquired by the company. We are all about world leadership in technology, not litigation."

Well, that good intention lasted for all of four years. Now, Xinuos is singing a different song. In the US District Court of the Virgin Islands, the company claimed: 

First, IBM stole Xinuos' intellectual property and used that stolen property to build and sell a product to compete with Xinuos itself.  Second, stolen property in IBM's hand, IBM and Red Hat illegally agreed to divide the relevant market and use their growing market powers to victimize consumers, innovative competitors, and innovation itself.  Third, after IBM and Red Hat launched their conspiracy, IBM then acquired Red Hat to solidify and make permanent their scheme.

We heard this song before and we weren't impressed the first time. Neither is IBM. "Xinuos's copyright allegations merely rehash the stale claims of its predecessor, whose copyrights Xinuos purchased out of bankruptcy—and have no merit. Xinuos's antitrust allegations, brought against IBM and Red Hat, the world's largest open-source company, similarly defy logic. IBM and Red Hat will aggressively defend the integrity of the open-source development process and the inherent choice, and thus competition, that open source fosters."

With one step forward and one step back, we move ever so slowly to the end of SCO vs. IBM.

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