18-year lawsuit between IBM and SCO has finally come to an end

18-year lawsuit between IBM and SCO has finally come to an end

Judicial litigation between the companies Santa Cruz Operation (SCO) and IBM regarding the rights to the Linux kernel code may end soon. As reported in the US bankruptcy court for Delaware County, TSG Group, representing the interests of debtors of the bankrupt SCO, has settled all remaining claims with IBM.


"In accordance with the Settlement Agreement, the parties agreed to resolve all disputes among themselves regarding the payment to the Trustee [TLD] on behalf of IBM in the amount of $ 14.25 million," - stated in the court ruling.


TLD has waived all rights and interests in all pending or future legal claims against IBM and Red Hat, and for any allegation that Linux infringes on SCO Unix or Unixware intellectual property. The TLD's legal representative said that a successful trial of unfair competition claims will require a jury to prove that events that occurred many years ago constituted unfair competition and harmed SCO. ” The amount of damage would have been impossible to determine, and the payments would presumably have been significantly less than in the case of an amicable settlement.


If the court approves the agreement, the conflict between IBM and SCO, which has been dragging on since 2003, will be settled. However, this does not mean that IBM is now completely safe from attacks over the rights to Linux code. Xinuos (formerly UnXis), which inherited most of the intellectual property of the original SCO, filed a lawsuit against IBM and that Red Hat in the spring of 2021. Xinuos has accused the tech giant and its subsidiary of violating antitrust laws and intellectual property rights. In response, IBM said that "the accusations are simply repeating the statements of its predecessor [...] and have no basis."


First, Xinuos claims that IBM stole its intellectual property, which it used to create and sell the product, in order to compete with Xinuos itself. Second, IBM and Red Hat allegedly agreed to unlawfully carve up their respective markets and use their growing forces to harass competitors and stifle innovation. According to Xinuos, IBM acquired Red Hat with the aim of strengthening its market position and using the illegal scheme on an ongoing basis.

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