Michigan Circuit Judge Ray Lee Chabot granted the automaker's motion for dismissal on all but one minor matter. The decision effectively scuttled SCO's suit claiming DaimlerChrysler had refused to certify it was not, by using Linux, violating its Unix contract. SCO, in a $50 billion lawsuit against IBM and other litigation, claims its Unix code has been illegally incorporated into the freely distributed Linux.

However, Chabot rejected the argument, leaving only one point of contention to be resolved: whether DaimlerChrysler missed a 30-day deadline for responding to SCO's initial demands.

SCO initially demanded the certification in December 2003. On April 6, a month after SCO had filed its suit, DaimlerChrysler confirmed that none of its computers was using the SCO software in question.

Last week, a Nevada court stayed a similar lawsuit SCO filed against Autozone pending the outcome of the IBM suit being tried in Salt Lake City's U.S. District Court. IBM, too, is seeking dismissal; a hearing in that case is set for Aug. 4.

SCO spokesman Blake Stowell would not answer questions about how serious a setback Chabot's ruling is, nor would he say whether the Lindon-based company plans an appeal.

"SCO was forced to file legal action against DaimlerChrysler after [it] refused to certify [its] compliance with the software agreement that our two companies have in place in the required time," he said. "It was only after we filed legal action against them that they finally decided to certify their compliance.

"Our understanding now is that the judge is allowing SCO to try and better determine why DaimlerChrysler took so long to certify their compliance," Stowell added. "As illustrated with this case, we just want assurance that our Unix licensees are holding to the terms of their software agreements."

SCO shares fell as low as $4.14 Wednesday - the lowest price since May 2003 - before closing at $4.63, down 10 cents or 2 percent.

A DaimlerChrysler attorney declined to discuss the ruling.

However, the open source community, a network of Linux programmers and supporters, lauded Chabot's ruling.

"This is another blow to SCO," said open source leader Bruce Perens, a Berkeley, Calif., Linux developer. "All they have left is a trivial 30-day response issue without any conceivable penalty or damages."

Laura DiDio, a Yankee Group analyst, said legal experts who thought SCO's case weak to begin with appear to have been right, at least in this case.

"SCO did not actually prove that DaimlerChrysler violated the terms of their agreement, though they were known to be a big Linux shop," she said.

bmims@sltrib.com