SCO has suffered a major setback that could derail its long-running copyright lawsuit against IBM. A US judge has severely limited SCO's claims relating to allegedly misused material.
The ruling upholds a magistrate's decision in the summer that said that The SCO Group "wilfully failed to comply" with court demands. The magistrate said that even if SCO proves its case, damages could be nominal rather than the $5 billion it claims.
SCO owns some intellectual property rights in the Unix operating system following a series of acquisitions, and earns fees through licences from the operating system.
SCO claims that IBM used some of its code in a version of the open source Linux operating system. IBM denies the claims.
SCO compiled a list of 294 allegedly misused materials. It said that approximately one third of these were cases of misused code and the remainder were cases of misused methods and concepts. But IBM argued that SCO had failed to identify the materials "with the most basic detail".
IBM said it was "left to guess as to SCO's claim[s]" and, in June of this year, Magistrate Brooke Wells agreed, throwing out 187 of the items in SCO's list, saying that the company had provided no evidence to back up its allegations. She said that the company failed to point the court to the exact parts of Linux which it claims were taken from its software.
When SCO said that IBM should identify the lines of code, Wells said that it was like a security guard asking a thief to prove that he had shoplifted.
In her judgment, Wells wrote that "the court finds that SCO has had ample opportunity to articulate, identify and substantiate its claims against SCO. The court further finds that such failure was intentional and therefore willful based on SCO’s disregard of the court’s orders and failure to seek clarification. In the view of the court 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.'"
In last week's ruling of the Utah District Court, Judge Dale Kimball upheld Wells's conclusions in what is a very serious blow to SCO. "The court finds that SCO failed to comply with the court’s previous discovery-related Orders, that SCO acted willfully, that SCO’s conduct has resulted in prejudice to IBM, and that this result – the inability of SCO to use the evidence at issue to prove its claims – should come as no surprise to SCO," said Dale's judgment.
"In addition, the court finds that neither particularized findings on an item-by-item basis nor an evidentiary hearing is required to make these determinations. The court, therefore, affirms and adopts the Magistrate Judge’s June 28, 2006 Order in its entirety."
Kimball also ruled that SCO must go through another case with Novell before the remainder of the IBM case is tried. Some of SCO's copyright claims over Unix result from a 1995 deal with Novell, but that company claims that it did not sell SCO copyrights to Unix. Kimball has ruled that that case must be tried before the remaining issues in the IBM case.
Editor's note, 05/12/2006: This story has been amended since it first appeared to clarify that it was not the bulk of claims in SCO's case that were thrown out last week. Instead it was the bulk of the items on the list of allegedly misused materials that were effectively thrown out. Apologies for the inaccuracy, and thanks to Pamela Jones at Groklaw for setting us straight.