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SCO Dealt Setback in IBM Linux Lawsuit

U.S. magistrate strikes down many of SCO Group's claims against IBM, saying SCO failed to show intellectual property was misappropriated when IBM donated code to Linux operating system project.

(Salt Lake City) A U.S. magistrate has struck down many of the SCO Group Inc.'s claims against IBM Corp., saying the Utah company failed to show its intellectual property was misappropriated when Big Blue donated software code to the freely distributed Linux operating system.

Magistrate Brooke Wells dismissed 182 of SCO's 294 claims, dealing a major setback to SCO's $5 billion lawsuit.

The suit, filed in 2003, accused IBM of donating SCO's Unix code to Linux developers, but Wells ruled SCO had produced virtually no proof of the allegation.

She said SCO had "willfully failed to comply" with court orders to show IBM which of millions of lines of code in Linux were supposedly misappropriated. SCO argued that was IBM's job.

Wells likened SCO's stance to a security guard who accuses a shopper of stealing merchandise _ and demands the shopper show proof of the theft.

"It would be absurd for an officer to tell the accused that 'you know what you stole; I'm not telling,'" Wells wrote in a 39-page decision signed Wednesday.

The magistrate said that if there was any merit to SCO's claims, they were likely to produce only nominal damages instead of billions of dollars.

"It is almost like SCO sought to hide its case until the ninth inning in hopes of gaining an unfair advantage despite being repeatedly told to put 'all evidence ... on the table,'" she wrote.

Wells dismissed SCO's arguments that only IBM engineers could verify that IBM gave away proprietary software code to Linux, a work of thousands of developers around the world.

"SCO's arguments are akin to SCO telling IBM, 'Sorry, we are not going to tell you what you did wrong because you already know,'" the magistrate wrote.

SCO acknowledged Friday that the ruling was a setback, but spokesman Blake Stowell said the company would continue to press its case. He said the magistrate dismissed general claims but kept several major ones that assert lines of Unix code were dumped into Linux.

The ruling capped a month of bad news for SCO. The company reported $4.69 million in losses for its most recent quarter, including nearly $3.8 million in new litigation expenses.

Any appeal would go to U.S. District Judge David Kimball, who has already upheld an evidence-related ruling by Wells that SCO had appealed.

IBM spokesman John Charlson said the company doesn't comment on litigation, but that Wells' ruling "says it all."

SCO doesn't have enough evidence "to shake a stick at," said Pamela Jones, creator and editor of Groklaw.net, a Web site devoted to open-source software legal issues.

"Linux is booming, and everyone knows now that the code has been examined every which way, and it's clean as code can be," she said.

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