Is SCO Down for the Count This Time?

U.S. District Judge Dale A. Kimball wrote Tuesday, "It is astonishing that SCO has not offered any competent evidence to create a disputed fact regarding whether IBM has infringed SCO's alleged copyrights through IBM's Linux activities."

But analysts and lawyers disagree on whether SCO is down to its last strike.

While Lawrence Rosen, an open-source legal expert and partner in the Ukiah, Calif.-based law firm Rosenlaw & Einschlag, described the latest developments as being merely "the delay of the inevitable," others don't see it as being such an open-and-shut case.

"Yes, this is very damning," said Thomas Carey, chairman of the business practice group at Boston-based Bromberg & Sunstein LLP. "Judge Kimball has seen all of the evidence presented to date, and has concluded that there is no there there.

"Unfortunately for IBM, Judge Kimball leaves open the possibility that intermediate forms of the code found in AIX may present the missing link between Unix and Linux," Carey said.

"Thus, substantial additional discovery will take place. There is plenty of risk left for IBM: the risk that the judge may misinterpret code similarities that should not really amount to infringement; the risk of confusion at trial; the risk that the judge may commit reversible error, causing the whole case to be retried; and the risk that the case may turn on some obscure point of law that is essentially irrelevant to the bona fide nature of Linux," he said.

Click here to read about a minor win for SCO in the case, when IBM was ordered to turn over the source code of "all versions and changes" of IBM's AIX and Dynix Unix operating systems.

Stacey Quandt, senior business analyst for the Robert Frances Group, said the judge's decision not to dismiss SCO's case at this time reflects his desire to avoid a lengthy appeals process.

"It is clear that the judge wants to avoid an appeal and is hence enabling both IBM and SCO to complete their discovery process," Quandt said. "This means IBM's hope of the judge granting summary judgment, while still possible, will take longer to achieve."

Kelly Talcott, a partner with international law firm Kirkpatrick & Lockhart Nicholson Graham LLP, said Kimball's statement about a lack of evidence is not the only factor to consider in the case.

"The judge made it clear that he has seen no evidence to date that IBM has infringed any SCO copyright relating to Linux. Given SCO's numerous public statements to the contrary, that is certainly a problem for SCO going forward. But it's not the whole story here," Talcott said.

"The judge is now raising the SCO breach-of-contract claim. In fact, SCO's breach-of-contract claim is one of the main roadblocks that Judge Kimball cites as standing in the way of summary judgment in IBM's favor. Given the apparent lack of evidence to date of direct infringement, it may be that SCO's strongest claim turns out to be its breach-of-contract claim," he said.

Next Page: "A very bold move or surefire suicide."

Talcott also agreed with Quandt that by not dismissing The SCO Group Inc.'s claims, as IBM had requested, Judge Kimball is trying to avoid a drawn-out appeals process.

"The court was not going to risk being reversed on appeal by granting IBM's motion at this time, when SCO can claim that it is still evaluating discovery presumably received from IBM as a result of SCO's discovery motion."

Laura DiDio, Yankee Group senior analyst, said SCO is taking big chances with its IBM lawsuit. "SCO's decision to file a multibillion dollar lawsuit against IBM is [making a] bet for company strategy. It's either a very bold move or surefire suicide.

"That said, nothing would surprise me about this case," DiDio said. "He's basically said he's seen no hard, actual evidence from SCO to support its claims, but he still has lingering doubts or maybe believes that there is a shred of credibility to SCO's claims because he stopped short of granting a summary judgment."

Still, she said, "As the party that launched the suit, the onus is squarely on The SCO Group to prove its claims. And yes, Judge Kimball's remarks in rendering his ruling were a scathing indictment against SCO—on the surface, the deck appears to be stacked higher than the Sears Tower against SCO."

"This may indeed be 10 to zero with two outs, no one on base, and two strikes on the hitter. But you have to remember that last September, the Red Sox were down 3-0 and two outs away from elimination in the American League East divisional race, when they rallied and stunned the Yankees—in Yankee Stadium, no less, and as a native New Yorker and lifelong Yankee fan, I still cringe!!" DiDio said.

Therefore, she said, "SCO could still pull out a long-shot victory if it has the evidence it claims it does, and if the evidence stands up to the scrutiny of jury and judge. Or this case could turn out to be the biggest nothing since Geraldo Rivera opened Al Capone's vault on national TV and didn't even find cockroaches!" she said.

But DiDio said she still has her doubts about Linux's intellectual property foundations. "There is a larger issue, though: Even if the SCO case gets dismissed entirely, it does not remove the copyright cloud hanging over Linux and open source."

As for the IBM-SCO case at hand, Rosen observed, along with the others, that, "SCO has backtracked so much on its complaints about Linux that the notion of Linux copyright infringement is no longer an important part of the lawsuit."

Speaking just for himself, Rosen said, "We should let SCO and IBM continue to battle over the remaining contract causes of action until, ultimately, SCO will crawl back into its grave with the stake in its evil heart."

SCO, however, doesn't see it that way.

"We are pleased by the court's order denying all three of IBM's motions to effectively dismiss SCO claims without a trial," said Blake Stowell, SCO's public relations director. "Coupled with last month's ruling from the magistrate judge on discovery, we are looking forward to our day in court."

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