SCO vs. IBM case over who owns Linux comes back to life. Again

SCO wins a round: Court of Appeal sends one aspect of case back to lower court

The seemingly endless legal battle between SCO and IBM battle over who owns UNIX, and perhaps bits of Linux, too has re-emerged. And this time SCO has had a win.

As Groklaw records, this case kicked off in 2003. The dispute centres on “Project Monterey” a joint effort by SCO and IBM to build a unified UNIX capable of running on several different microprocessor architectures. SCO – at that time known as the Santa Cruz Operation – sold versions of UNIX and tossed some of its source code into the Project Monterey mix, as did IBM. The parties signed a “joint development agreement” (JDA) to formalise the deal.

Monterey went pear-shaped because it was complex. Then Linux came along and ate its lunch. But SCO alleged that IBM had no real interest in the project and just wanted to see what was inside its versions of UNIX. As IBM later contributed plenty of code to Linux, and used some SCO code in a test version of AIX, SCO and its many legal successors have tried for years to prove that Big Blue lifted its code. At stake, potentially, is omnizillions of dollars in damages given Linux now runs in the guts of a billion Android devices and who-knows-how-many other servers, cars, smart TVs and other widgets. Or lesser damages if AIX alone used SCO code.

When the case last surfaced, SCO looked to finally be dead and buried because it was broke, had no assets other than the potential of a claim against IBM and even that looked unlikely to amount to anything.

But SCO has since appealed, challenging three recent decisions in the case. And as the judgment [PDF] records, one of its claims has succeeded to the extent that the United States Court of Appeals for the Tenth Circuit wants it to go back to the District Court.

On your correspondent's reading of the judgment, it hinges on an argument that the District Court's understanding of “misappropriation” was too narrow.

As the majority judgment says, “while IBM 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 collaborator’s property in bad faith and without his consent in order to compete against that owner’s use of the same property.”

“Because that duty is separate from the JDA, even though the JDA addresses the same topic, the independent tort doctrine does not bar SCO’s misappropriation claim. Accordingly, the district court’s order cannot be affirmed on this ground.”

The case is therefore on its way back to the District Court. A dissenting judgment suggested it could go back on other grounds too. For now, however, the mere fact that SCO's allowed back into court will help it to raise the money needed to do so ... and help to pay Reg hacks' salaries, too. ®