In a mixed ruling on Tuesday, a federal judge has denied SCO's motion to throw out a suit brought by Linux seller Red Hat but has put the case on hold, awaiting an outcome in a related case between IBM and SCO.
Red Hat sued SCO in August, seeking a judgment that Red Hat's sales of Linux have not violated any of SCO's copyrights or trade secrets relating to Unix, the operating system on which Linux is modelled. In September, SCO countered that the case should be dismissed, because the company's legal actions haven't targeted Red Hat.
"SCO's conduct has created a reasonable apprehension of suit," said Sue Robinson, chief judge in the ruling for the US District Court in Delaware. "SCO has publicly stated that it has issues with Red Hat."
But she thwarted Red Hat's attempt to put a swift end to the SCO case. It would be "a waste of judicial resources" to have two courts simultaneously handling cases about whether Linux contains misappropriated Unix source code, Robinson said, staying the case until there is a resolution to the IBM-SCO case.
Red Hat declined to comment for this story. SCO spokesman Blake Stowell said the company was disappointed the case wasn't dismissed but said it now will be able to concentrate its energies on its remaining legal actions.
The IBM case is scheduled to go to trial on 11 April, 2005. However, SCO on Monday asked that the trial be pushed back to 15 September, 2005.
SCO attorneys argued in a motion that they have 10 IBM counterclaims to reckon with, that the evidence discovery process was delayed for months, and that "IBM's untimely responses to discovery have hindered orderly prosecution of the case." IBM declined to comment immediately.
SCO and its attorneys, the high-profile firm of Boies, Schiller & Flexner, still has four major cases to grapple with: the original suit, accusing IBM of breaching contracts and violating copyrights by moving Unix technology to Linux; a suit against earlier Unix owner Novell, rebutting claims that Novell still owns Unix copyrights; a suit against former SCO customer AutoZone, asserting that its use of Linux violates Unix copyrights; and a suit against Unix licensee and Linux user DaimlerChrysler, asserting that the carmaker violated its Unix contract obligations to say how much Unix it's using.
Linux booms
The cases have raised some concerns about Linux, an open-source operating system initially created by volunteers worldwide and later boosted by help from most of the world's largest technology companies, but its adoption continues to surge.
Linux server sales boomed 63 percent to $960m (£522.2m) in the fourth quarter of 2003. And Red Hat chief executive Matthew Szulik told financial analysts in March that "we saw no decrease in demand because of lawsuits." He also noted that the company signed up 4,000 new customers and 87,000 new subscriptions to pay for its Red Hat Enterprise Linux software.
Linux programmers vehemently oppose SCO's actions. At a Novell conference two weeks ago, Linux founder and leader Linux Torvalds flatly rebutted SCO's claims. "There's no Unix in Linux," he told show attendees.
But Torvalds is uneasy about another intellectual-property area: "The things that tend to worry me are things like software patents, where nontechnical issues can be used to stop developers, to stop people from doing what they want," Torvalds said.
Novell, which became the No. 2 Linux seller with its $210m acquisition of SuSE Linux in January, offers customers some legal protection against copyright infringement. But at the show, Novell chief executive Jack Messman said patent protection is "a more difficult area to provide indemnification for... My guess is we will not do that, because the exposure is much greater".
Talkback
Quite how SCO thinks that IBM have been untimely is baffling me. If you look at http://www.groklaw.net you'll see that it is SCO that have delayed, ignored court orders and generally not shown everything that they have been ordered to do.
It will be interesting to see how IBM and the Judge respond to this, especially since SCO seem to be deliberately baiting the judge by saying that their case has been delayed (by the judge!)
I still can't understand how a company can make such unsubstantiated statements for so long in a modern justice system.
Novell, HP and other major consultants on Linux could sue for potential loss of income that sorry state of affairs is causing them. There is lot more substance there than in any of SCO's allegations.
Is the DOJ partiality to M$ being displayed here again, now that the MS/SCO link is established ?
Disgusting.
Judge Robinson ruled that Redhat had a case against SCOG that should proceed toward trial. However, she noted that the central issue to be decided in the Redhat case, whether Linux contains any code that was misappropriated from SysV code owned by SCOG, was also an issue in the IBM case, and stayed the Redhat case until this issue was decided in the IBM case.
She did not emphasize that SCOG is under court order to send IBM the information needed to decide this issue, and that the deadline is April 19, eight days from now.
Further, Novell's motion to dismiss SCOG's suit against Novell will probably be granted within a month, and possibly on grounds that SCOG did not provide evidence that Novell transferred any copyrights to old SCO.
Finally, IBM's latest amendments to its counterclaims cover essentially all the issues that Redhat raised in its suit.
Redhat can now let IBM and Novell carry the ball, and Redhat can have its case won for it with no legal expenses.
Meanwhile, SCOG gets no benefit from the delay, since the IBM and Novell suits are now proceeding rapidly, and all the news is bad for SCOG, so further pumping the stock price will be next to impossible.
By moving to delay the IBM trial, SCOG has given IBM a marvelous opportunity to catalog the ways that SCOG tried to delay the trial and withhold the information that IBM and the judge properly requested, while complaining that IBM had not given information requested by
SCOG's improper fishing expedition.
On December 5, the judge ordered SCOG to supply this information and stayed SCOG's discovery from IBM. On January 12, SCOG defied the court order with respect to its claimed rights in Linux, asked for more time to get some minor items, and complained that the fish that IBM had given were not enough to allow SCOG to state its claims precisely.
On February 6, we found that SCOG had still not provided the basic information needed before SCOG would have a right to initiate discovery. The judge invited IBM to request dismissal at that point, but IBM suggested giving SCOG more rope (oops, time). SCOG ask for 30 days, so the judge pondered for a month, gave them an additional 45 days, and told IBM to complete its own response to a subset of SCOG's interrogatories defined by IBM with the same deadline.
I am sure that IBM will describe all this and more in its response to SCOG's motion to delay the trial.