Staking the Vampire: SCO's case comes to an end?

Jul. 04, 2006

Since day one of The SCO Group's lawsuit against IBM on the grounds that the corporate giant had stolen its Unix intellectual property for the betterment of Linux, SCO's opponents have shouted that there was nothing to the company's accusations.

Now, more than three years since the fight began, lawyers think that the court's recent decision to dismiss many of SCO's claims has shown that SCO's enemies were right all along.

What appears to be the real end of the case came on June 28. On that day, U.S. District Court Magistrate Judge Brooke Wells dismissed about two-thirds of SCO's claimed 294 examples of IBM contributing Unix code to Linux.

Is there anything of substance left to SCO's case? The lawyers say no.

Michael R. Graham, intellectual property attorney and partner with Marshall Gerstein & Borun LLP, an IP-specialty firm based in Chicago, said, "Judge Wells' order striking 198 claims against IBM brought by SCO is a clear example of SCO being hoisted by its own petard. Since SCO has since 2003 demanded that IBM produce specific examples of code, Judge Wells ruled that SCO may be held to the same standard. Although SCO produced 450,000 lines of code, claiming in more than 200 claims that IBM had infringed its methods and concepts in parts of the Linux code, it refused to identify with specificity what parts of the code contain or embody the allegedly infringing methods and concepts."

"Faced with this refusal, IBM argued, and Judge Wells agreed, that SCO should be denied the ability to assert the claims for which it had not identified code. While this is an extreme sanction, it is based on the Court's determination that SCO's failure to provide specificity was willful, a not unreasonable holding in light of the fact that SCO and IBM have challenged the sufficiency of each other's discovery responses since late 2003."

There is no question that the Judge was fed-up with SCO's refusal to show any specific evidence. Wells tore into the Lindon, Utah-based company for not producing any specific evidence to prove its accusations, despite "given SCO's own public statements ... it would appear that SCO had more than enough evidence to comply with the court's orders."

John Ferrell, a founding partner of Palo Alto, Calif.-based technology law firm Carr & Ferrell LLP, noted that "There are few things scarier to lawyers than an angry federal district judge."

It's not like the court doesn't have reason to be angry. "After some three years and millions of pages of documents exchanged, it's curious that SCO still apparently hasn't identified the code infringed," said Ferrell.

So, what next?

Graham thinks SCO will have no choice but to appeal this since. "The remaining counts in SCO's complaint lack any sort of monetary impact, however, and I would presume that SCO will mount an aggressive appeal of this decision."

Lawrence Rosen, a partner in the technology law-firm Rosenlaw & Einschlag agrees, but he doesn't think the appeal will do SCO much good.

There's "Not much left for SCO but to appeal this almost-fatal ruling in its already weak case. Yes, it is the beginning of the end. I expect summary judgment will be the stake that kills this vampire long before it gets to trial."

Despite that, though, Ferrell feels that SCO may have no choice in the matter but to fight this decision out on appeal. "The real concern for SCO being sanctioned now this late in the case, is that without a really good reason for keeping this lawsuit going, SCO ultimately may get saddled with paying IBM's court costs and attorney fees. No doubt a breathtaking sum that could well asphyxiate this struggling company."


-- Steven J. Vaughan-Nichols