Ancient ‘Who owns Linux?’ case now has one foot very deep in the grave

The protracted legal dispute surrounding ownership of Linux appears to be nearing its conclusion after a panel of three judges determined that a claim against IBM and Red Hat lacks validity, and further action is no longer permissible. The story begins in 1998 when IBM aimed to create a single version of UNIX operable on various processor architectures.

To accomplish this, IBM teamed up with a company called Santa Cruz Operation (SCO), which developed a UNIX version for x86 CPUs. Intel and Sequent joined the multi-architecture project, known as "Project Monterey." However, the alliance proved unsuccessful, primarily due to the emergence of Linux, a *Nix operating system that ran on multiple processors and introduced a novel software development approach.

IBM subsequently incorporated some of the code developed during Project Monterey into Linux, leading SCO and its legal successors to assert ownership of that code and subsequently seek a legal claim over Linux. The potential value of this claim is substantial, as Linux is prevalent in billions of devices, such as Huawei, which earns $0.50 for every device utilizing its Wi-Fi 7 intellectual property.

Given the ubiquity of Linux, the royalties from the operating system could be considerable. In 2021, an heir to SCO reached a settlement with IBM for $14.25 million, reflecting the fact that SCO had, for years, failed to present robust evidence supporting its claims. Another legal successor, Xinuos, filed a new claim, alleging that IBM should be responsible since the company was aware it did not own the code it contributed to Linux but rather possessed a non-exclusive license to utilize it.

Xinuos argued that when IBM contributed Project Monterey code to Linux, it violated the license. Xinuos pursued this argument in the US District Court for the Southern District of New York, but failed to convince the court that IBM and Red Hat had any grounds to challenge. Xinuos appealed, and on August 10th, the United States Court of Appeals for the Second Circuit decided not to re-examine the District Court's decision, agreeing that the original legalese governing Project Monterey made it too late to re-litigate the matter.

Additionally, the Appeals Court affirmed that Xinuos attempted to frame the case as a licensing issue, but ultimately argued that the core issue was ownership. However, Xinuos plans to submit a petition to have the case heard by the full bench of the Court of Appeals, a rarely occurring occurrence, as it generally only happens when the court identifies significant errors or major legal issues, warranting a rehearing. Based on the current developments, the legal matter seems poised for a final resolution.