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

The long-standing legal dispute surrounding ownership of the Linux operating system appears to be nearing its conclusion, as a panel of three judges recently ruled that a claim against IBM and Red Hat is invalid, and that time has expired for pursuing further action. The story began in 1998 when IBM sought to create a single version of UNIX capable of running on various processor architectures.

To achieve this, IBM partnered with Santa Cruz Operation (SCO), which developed a version of UNIX for x86 CPUs. Other companies, including Intel and Sequent, also joined the multi-architecture effort, known as "Project Monterey." However, the alliance failed, primarily due to the emergence of Linux, which provided a *Nix-compatible system for multiple processors and introduced a novel software development approach.

IBM subsequently incorporated some of the code developed during Project Monterey into Linux, leading to SCO and its legal successors claiming ownership of that code and asserting a legal claim over Linux. The potential value of such a claim cannot be underestimated, given that Linux powers billions of devices worldwide. For instance, Huawei, which holds patents generating $0.50 in royalties per device utilizing its Wi-Fi 7 IP, could potentially earn substantial revenue from Linux-based devices.

In 2021, SCO's heir settled with IBM for $14.25 million, reflecting the fact that SCO had consistently failed to provide substantial evidence to support its claims. Another SCO legal successor, Xinuos, filed a fresh claim, arguing that IBM should be held liable since the company had knowingly contributed code to Linux without possessing an exclusive license.

Xinuos further contended that IBM breached the license agreement when it integrated Project Monterey code into Linux. Xinuos brought this argument before the US District Court for the Southern District of New York but was unsuccessful in convincing the court that IBM and Red Hat had any grounds for a lawsuit. Xinuos then appealed the decision, but on August 10th, the United States Court of Appeals for the Second Circuit refused to reconsider the District Court's ruling, maintaining that the original legal framework governing Project Monterey makes it too late to re-examine the matter.

The Appeals Court also acknowledged that Xinuos attempted to frame the case as a licensing issue but ultimately argued that the dispute revolved around ownership. Notably, Xinuos has expressed its intention to file a petition to have the case reheard by the full bench of the Court of Appeals, although this rarely occurs unless the court identifies significant errors or major legal issues that warrant a re-evaluation. Consequently, the legal battle over Linux's ownership may soon come to a definitive end.