Just when Linux users thought they were safe: SCO is back!

Dennis Faas's picture

In mid-August of 2007, SCO, a long-time supplier of Unix-based systems and the arch-nemesis of all things Linux, lost its battle with Novell and IBM over the ownership of Unix. It was a death-blow. SCO promptly filed for Chapter 11 bankruptcy. But now, it's back! (Source: Internetnews.com)

In August, a U.S. District Court decision brought to a conclusion the long history of SCO-Linux controversies that began five years ago. In early 2003, SCO launched a campaign to challenge alleged infringement on their intellectual property -- particularly their "ownership" of Unix. Moreover, SCO called into question the validity of the GPL -- the GNU General Public License under which most open source is licensed and specifically under which the Linux kernel is licensed.

By Spring of 2003, SCO sued IBM over its contributions to Linux alleging that IBM stole Unix trade secrets and provided them to Linux kernel developers. It then sent letters to 1500 of the world's largest corporations alleging that use of Linux violated copyrights they held on original Unix source code. By the end of that summer, SCO then threatened that it would begin invoicing users of Linux.

The invoicing never happened, but the Linux community didn't sit still to these challenges. In addition to a flurry of suits and injunctions sought by the likes of Red Hat, IBM, and others, there is some reason to believe that SCO was subjected to a string of DoS (Denial of Service) attacks on its website. The largest attack was the "MyDoom Computer Worm" followed by the Google insult of returning SCO's website as the first entry to a search of the phrase "litigious bastards".

Google's search results could easily be considered accurate. During 2004, SCO filed additional suits against Novell, Autozone, DaimlerChrysler. The DaimlerChrysler suit was subsequently dismissed and the years 2005 and 2006 were largely spent addressing issues resulting from the suits and subsequent countersuits from Novell. At one point in early 2007, SCO expanded the IBM and Novell cases by involving GrokLaw in both suits. Groklaw is a blog focused on legal news for the open source community.

Finally, in August of 2007, the SCO vs. Novell court case resulted in a ruling that "Novell is the owner of the Unix and UnixWare copyrights." The next month, SCO filed for Chapter 11 bankruptcy protection thereby staying all suits against it and resulting in the company being delisted from the NASDAQ stock exchange. (Source: linux-watch.com)

Now, as a result of $100 million injection of cash from Stephen Norris Capital Partners (which now has a controlling interest) to help SCO emerge from bankruptcy, the question is: What will happen next? The company makes no bones about the fact that the new business plan for SCO includes pursuing its legal claims. Given that SCO's legal track record thus far has done little more for SCO's claim of ownership than pay a lot of lawyers and get a decision in favor of Novell, one has to wonder why Stephen Norris Capital Partners bought in.

Either there's an exciting and potentially industry-rattling legal battle on the horizon... or this is another prime example that the "greater fool" theory is still a fundamental part of business physics.

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