$1 billion lawsuit against IBM could taint Linux

SAN JOSE — SCO Group's $1 billion lawsuit against IBM for allegedly giving away trade secrets in its open-source Linux programs is a potential boon to Microsoft and other proprietary software companies.

SCO acquired the Unix operating system in 1995. It claims IBM is freely distributing proprietary code by converting aspects of its own Unix variant into a Linux product.

IBM spokesman Joe Stunkard said yesterday that the complaint was "full of bare allegations with no supporting facts."

Linux, a Unix derivative first developed in the early 1990s by Finnish college student Linus Torvalds, has in recent years gained in popularity because of its low cost, reliability and ability to run on inexpensive computer hardware.

Though SCO claims it is targeting IBM alone in the suit, which was filed late Thursday in a Utah state court, analysts say the case could cast uncertainty over all companies that offer Linux.

"The people who would really benefit are folks like Sun Microsystems and Microsoft because this casts some fear, uncertainty and doubt on the Linux market and will cause some folks who were about to embrace Linux to pause," said David Freund, an analyst at Illuminata.

SCO denies it is attacking the Linux or open-source movements. In fact, it offers its own distribution of Linux.

"Our issues are only about people we have licenses with and have contractual commitments that they need to keep," said Darl McBride, SCO's chief executive. "It's not a debate about the merits about proprietary versus open-source software."

He declined to talk about the possibility that other Linux distributors, such as Red Hat or SuSE Linux, might be sued. McBride also declined to talk about other large computer vendors moving toward Linux, including Hewlett-Packard and Sun Microsystems.

Bruce Perens, an open-source software pioneer and consultant, said SCO's lawsuit is an effort to position itself for a takeover by IBM or Microsoft. He does not believe the allegations will harm the open-source movement.

For years, Microsoft has tried to muster doubt.

"Do you really think SCO can do what Microsoft failed to do? I think that people in the industry will see this case as ludicrous," Perens said.