The SCO vs. Linux Saga: 20 Years of Open-Source Turmoil

Two decades ago, SCO turned its back on its Unix and Linux heritage and attacked Linux. It became a defining moment in Linux's history.

Today, many Linux users would be shocked to know that there was once a lawsuit aimed squarely at Linux's heart: Its intellectual property (IP). Some people even thought SCO's lawsuit against IBM might end Linux. That didn't happen, but it did make the Linux community realize it had to understand its IP's legal and source code history.

Curiously, The SCO Group had started as an x86 Unix company. SCO was then acquired in a complex deal in August 2000 by Caldera, then a leading Linux company. The plan, as Ransom Love, then Caldera's CEO, said, "was to see how Unix could expand and extend Linux." That was not what happened.

Instead, the combined company was renamed SCO, and a new CEO Darl McBride was appointed. McBride then led SCO's legal assault on IBM and Linux. To sum up his start and tenure, a former McBride co-worker, said it best, "Congratulations. In a few short months, you've dethroned Bill Gates as the most hated man in the industry." That was true.

Why did SCO make this move? Love, who thought the lawsuit was a mistake, speculated after he left that it was prompted by "Caldera investors who wanted a quick return [pressuring] the management." Others suspect, with reason, that the investors were influenced by Microsoft. Later it was revealed that Microsoft had helped pay for SCO's IBM lawsuit.

The first shot in SCO vs. Linux was fired in March 2003, when SCO filed a lawsuit against IBM, alleging that IBM had contributed portions of SCO's Unix System V source code to the open-source Linux operating system. SCO sought over $1 billion in damages, later increasing the claim to $3 billion, and then to $5 billion. IBM, of course, returned the favor and sued SCO. The lawsuit sent shockwaves through the technology industry, as it threatened the very foundation of the open-source movement and Linux's future.

The Linux community, led by Linus Torvalds and other prominent figures, quickly rallied to debunk SCO's claims. IBM, along with other major Linux distributors such as Red Hat and Novell, stood firm against SCO's allegations, pledging to defend Linux and the open-source community.

Members of the community, notably paralegal Pamela Jones with her Groklaw site, dug deeply into the legal reasons why SCO's case wasn't any good. I also covered the SCO lawsuits like paint and quickly worked out that SCO didn't have a case.

Reinforcing failure, in 2004, SCO filed another lawsuit, this time against Novell. In it, SCO claimed that Novell had falsely asserted ownership of Unix System V copyrights, which SCO believed it had acquired in the 1995 Asset Purchase Agreement with Novell. However, Novell countered that it had retained the copyrights and that SCO only acquired certain licensing rights. This lawsuit became a critical piece of the larger SCO vs. Linux conflict, as it directly related to the question of who owned the Unix copyrights.

As the legal battles unfolded, SCO faced a series of setbacks in the courts. In 2007, U.S. District Court Judge Dale Kimball ruled that Novell indeed owned the Unix copyrights, severely undermining SCO's case against IBM. Although SCO appealed the decision, the ruling was upheld by the Tenth Circuit Court of Appeals in 2011.

In the meantime, SCO's financial position deteriorated, culminating in the company filing for bankruptcy in 2007. Despite its ongoing legal and financial woes, SCO continued to pursue litigation against IBM and others.

The final blow to SCO's legal ambitions came in 2016 when a judge dismissed SCO's claims against IBM, effectively ending the long-running saga. Throughout the legal battles, the Linux community had grown stronger and more united, with Linux solidifying its position as a widely used and respected operating system.

You'd think that would be the end of the story, wouldn't you? SCO is bankrupt, and all its cases were lost. Alas, no.

A company named Xinuos bought SCO's Unix products and intellectual property (IP) in 2011. Then, on March 31, 2021, it sued IBM and Red Hat for "illegally Copying Xinuos' software code for its server operating systems" in the District Court of the Virgin Islands.

Here, we go again. In November 2022, Xinous' case was transferred to the US District Court for the Southern District of New York. I doubt it will be any more successful in this go-around than it did in the previous twenty years of court actions.

The SCO vs. Linux saga serves as a powerful reminder of the challenges faced by the open-source community in defending its principles against IP disputes. Ultimately, the resilience of the Linux community, along with the unwavering support of major industry players, ensured that Linux and the open-source movement would continue to thrive in the face of adversity. But, we can never forget that it must continue to defend its open-source IP foundations. Even now, open-source and Linux has its enemies.

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