MontaVista Software accused its competitor Lineo in April 2002 of selling software that originally came from MontaVista and had its copyright notices removed, said Jason Wachal, MontaVista's lead lawyer. MontaVista filed the suit in federal district court in Salt Lake City.
"It appeared to us that Lineo, which was still in its original incarnation, was distributing computer software to its customers or potential customers that had code in it that appeared to be written by MontaVista but that had all of the MontaVista copyright information stripped out of it," Wacha said.
Lineo later renamed itself Embedix and was acquired by Motorola subsidiary MetroWerks in December 2002. The suit was settled in the third quarter of 2003, Wacha said. Terms of the settlement are sealed.
Metrowerks spokesman Jack Taylor declined to comment on the case.
Because MontaVista has a strong interest in Linux and the General Public Licence (GPL) that governs it, it makes sense for MontaVista to want to settle the case so the licence doesn't come under question, said John Ferrell, an intellectual property attorney at Carr and Ferrell not involved in the matter.
"It's not surprising they would offer some kind of settlement issue just to avoid the GPL being litigated. MontaVista has been a big proponent of the GPL and says they're doing quite a nice business because of it," Ferrell said.
And the strategy overall is working, Ferrell added. "As time goes on, with each month and quarter that passes, I think the GPL becomes stronger and stronger," he said.
The MontaVista-Lineo case has some similarities to the much higher-profile legal battle between IBM and SCO Group, such as the GPL involvement, but one major difference is that both companies involved in the MontaVista-Lineo case support the GPL.
In the SCO-IBM case, SCO accuses IBM of violating its contract by moving code from Unix to Linux that SCO argues should have remained proprietary. In its countersuit, IBM argues that SCO's actions violated the GPL and thus IBM's copyrights.
In contrast, the MontaVista-Lineo case involves software that was covered by the GPL from the very beginning. The GPL explicitly permits code to be copied freely, as long as copyright notices and the GPL licence are preserved.
Another connection between the two cases is that SCO and Lineo sprang from the same company: Caldera. In 1999, Caldera spun off Caldera Thin Clients, later renamed Lineo. Caldera was funded by the Canopy Group, an angel investment firm launched by former Novell chief executive Ray Noorda.
Canopy Group became a minority investor in Lineo as investment rounds from other companies such as Motorola took a stake in the start-up. Canopy also lent Lineo money as it was "winding down," but never became a large shareholder again, Canopy chief executive Ralph Yarro said in an interview.
Lineo had initial public offering aspirations in 2000, but the company scrapped the plan in January 2001 because the previously manic investor interest in technology companies evaporated.
SCO spokesman Blake Stowell pointed to the case as evidence that open-source software such as Linux needs to be handled and tracked more carefully. "Fundamentally, there needs to be some mechanism in place to better police open source," he said.
