Judge's Ruling Signals 'Game Over' for SCO

The Utah federal court judge's ruling on August 10 -- that SuSE Linux distributor Novell does, in fact, own the copyrights to the UNIX operating system -- signals a major legal blow for The SCO Group. It ends a nearly five-year-old legal campaign that sowed fear, uncertainty and doubt (FUD) among Linux users and developers.

So says Jim Zemlin, executive director of the Linux Foundation.

"In three years of discovering, they couldn't find a single line of code in Linux that violated copyright," Zemlin said. "The fact of the matter is, from a legal perspective, Linux has always been a perfectly safe bet for companies and developers. Now, there's just no doubt about that."

The ruling renders moot Utah-based SCO's claim that the Linux open source operating system contains any UNIX code owned by the company. Had that been the case, it would have meant that Linux users were inadvertently violating SCO's copyrights. The ruling also effectively kills SCO's multi-billion dollar lawsuit against IBM for copyright infringement.

Reports about the "relief" that this ruling will provide for Linux users, worried about their investment in the OS, have been widely circulated. However, Zemlin points out that developers, too, are breathing a sigh of relief.

"Developers invest in a platform, too," he said. "They invest their time to master it, and they expect that investment to pay off in terms of jobs and opportunity."

But that sigh will be a quiet one, Zemlin added. He believes that Linux users and developers stopped viewing SCO's legal assertions against Linux as a real threat well before the ruling.

"Developers in particular tend to be ahead of the curve," Zemlin said, "and I think we've been seeing more and more of them going over to an open source development model, joining the party in the open world, and using Linux and open source development tools to create software, because they know that that is going to be a path of success for them over time."

SCO is a Utah-based provider of UNIX-based products, including the UnixWare operating system for enterprises, and the OpenServer operating system for low-cost, commodity hardware.

The company sued IBM in March of 2003, alleging that Big Blue infringed on its intellectual property rights by submitting some UNIX source code for use in Linux. SCO later filed similar lawsuits against Novell and Red Hat as Linux distributors, and DaimlerChrysler and AutoZone as Linux users. The DaimlerChrysler suit was dismissed by a judge in Michigan.

In a letter published on the SCO Web site, CEO Darl McBride told the company's customers and partners: "Although the district judge ruled in Novell's favor on important issues, the case has not yet been fully vetted by the legal system and we will continue to explore our options with respect to how we move forward from here."

For example, the Utah federal court did not dismiss SCO's claims against Novell regarding the non-compete provisions of the 1995 Technology License Agreement that relate to Novell's distribution of Linux "to the extent implicated by the technology developed by SCO after 1995," McBride wrote.

SCO also points out that it is still the exclusive licensor to UNIX-based system software providers. It owns all rights to the core UNIX operating system source code originally developed by AT&T/Bell Labs. SCO's ownership includes system source code, including all versions and copies, SCO OpenServer, and substantial copyrights and source code to UnixWare, company officials say.

Zemlin doubts the company will have the resources to continue its legal challenges. The company's stock took a deep dive on news of the ruling, dipping to 37 cents a share the day after. He points out that the company is facing delisting. (A company's shares are excluded from listing on the stock exchange if its shares trade for less than $1 for 30 consecutive days.)

"The market has spoken here," he said. "For SCO, it's game over."

The ruling against SCO's claims is likely to dissipate much of the FUD around the Linux operating system, but software copyright issues may continue to dog the OS, according to Gartner Analyst George Weiss. On the horizon are potential claims from Microsoft, which has asserted that Linux violates 107 of its software patents.

"The SCO ruling is good news, but Microsoft is still out there," Weiss said.

About the Author

John K. Waters is a freelance writer based in Silicon Valley. He can be reached at [email protected].