IBM Throws Knockout Punch at SCO

Computing giant IBM is seeking a declaratory judgment in its ongoing defense and counterclaim lawsuit with SCO, which has based its US$5 billion suit against Big Blue on copyright and contract issues surrounding SCO’s intellectual-property claims to Linux.

While SCO, which has threatened and sued users of the Linux operating system since its original suit against IBM a year ago, has based its legal arguments on contracts with the different companies, IBM now is turning copyright-infringement claims around on SCO, denying any Big Blue violations and accusing SCO of multiple violations. The IBM counterclaims include copyright and patent infringement and breach of contract.

Chastising SCO for failing to produce evidence to back its claims and also damaging it and the open-source movement at large, IBM argued in its court filing that the Utah-based company should be punished for its conduct.

Harvard Research Group vice president of Linux strategy Bill Claybrook said there is an underlying faith in the computing industry that IBM will either prevail in the case or provide the necessary remedies for Linux users if SCO scores any type of victory.

“I think that’s really the reason Linux hasn’t suffered in the marketplace — because SCO picked the wrong company to sue in IBM,” Claybrook told LinuxInsider. “People do believe if something happens, IBM will take care of it.”

SCO’s Lack of Disclosure Criticized

In its court filing, IBM criticized SCO for its lack of disclosure in the case and accused SCO of creating a scheme of false perception over its intellectual-property rights.

“These counterclaims arise from SCO’s efforts to wrongly assert proprietary rights over important, widely-used technology and to impede the use of that technology by the open source community,” said IBM’s filing.

“SCO has misused, and is misusing, its purported rights to Unix operating systems developed originally by Bell Laboratories, then a research and development arm of AT&T Corp., to threaten destruction of the competing operating systems known as AIX, Dynix and Linux,” the filing said.

IBM argues it is not in violation of SCO’s copyright and is therefore entitled to a declaration of such, as well as damages to be determined in court.

IBM’s Linux Allegiance

IBM also criticized SCO for its use of and participation in Linux and open-source software development, which is now SCO’s basis for its threats and legal action against others.

“At least until it undertook the scheme described herein, SCO contributed tools and technology to the open-source community,” said the IBM filing. “In fact, SCO’s business model depended upon incorporating contributions from the open-source community into products that it open-sourced.”

However, IBM said, SCO failed to establish a successful business around Linux, unlike Big Blue, which has invested billions of dollars and which uses and sells the operating system in its offices and across its products.

Claybrook said that with Linux so ingrained in its hardware, software and strategy, IBM has too much at stake not to fight SCO with all of its force.

SCO Spite and Denial

Although it has been unable to convince more than a handful of companies to purchase a Linux license on the basis of its contested claims, SCO probably will find more licensees that do not want to worry about potential litigation, according to Claybrook. He reported that SCO also may be enticing licensees by offering a deal that covers existing Linux servers and extends to greater numbers of them, so a company could license 100 servers and purchase 1,000 more with no additional license cost.

Still, Claybrook and legal experts have questioned the value of a license for something that is in dispute.

“I’d like to know the compelling reason to buy now, given that there’s a significant challenge to their ownership,” technology legal expert and Finnegan-Henderson partner Jeff Berkowitz told LinuxInsider. “I just don’t see it, to be honest. What’s the compelling reason to spend my company’s money?”

Claybrook also referred to disdain for SCO, indicating some organizations might even buy Linux to spite the company. Regardless of the outcome, Claybrook, referring to Linux vendor Red Hat’s recent positive financial report, said Linux does not appear to be slowing down as a result of the SCO cases and controversy.

“Even if SCO wins big, things will go on as normal,” Claybrook said. “I don’t think things will be affected by this. The lawsuit has sort of just worn everybody out, and now we’re just ignoring it. We’re sort of in denial.”

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