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Michigan ruling is a setback for SCO

Published January 25, 2005 12:01 am

Appeals panel: Lawsuit had targeted contract with DaimlerChrysler
This is an archived article that was published on sltrib.com in 2005, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

The Michigan Court of Appeals has refused a bid by Utah's SCO Group to

resurrect its Linux-related lawsuit against auto giant DaimlerChrysler.

The decision came on a July 2004 ruling by Michigan Circuit Judge Rae

Lee Chabot dismissing all but one minor, technical matter in SCO's suit

alleging DaimlerChrysler had violated its Unix contract through its use of

the popular Linux operating system.

SCO, in its $5 billion lawsuit against IBM and in other ongoing

litigation with Novell, Autozone and RedHat, claims its Unix code has been

illegally incorporated into the freely distributed Linux.

SCO spokesman Blake Stowell had no comment on the setback Monday, other

than to say that the Lindon software company's "legal team [is] still

reviewing the dismissal and considering its next steps."

News of the ruling came just days after SCO claimed a notable, albeit

minor, victory in a Salt Lake City federal court case against IBM. Last

week, U.S. Magistrate Brooke Wells gave IBM until March 18 to provide SCO

with more than 2 billion lines of AIX and Dynix code, along with the

programs' developmental details.

However, on Monday leaders in the pro-Linux "open source" community

celebrated the Michigan ruling as a possible portent for the SCO-IBM case,

expected to go to trial this coming fall.

"There was never any hope [the DaimlerChrysler appeal] would succeed,"

said Bruce Perens, a Berkeley, Calif.-based Linux developer. "In the

aftermath of the dismissal of the masterminds of this whole [Unix-Linux

litigation] SCO is really running on vapors."

Perens referred to last month's management coup at Canopy Group, the

technology investment firm that is the majority stockholder in subsidiary

SCO. Canopy now is run by chief executive William Mustard; ousted were

longtime CEO Ralph Yarro and Darcy Mott, his chief financial officer.

"SCO's case against Daimler-Chrysler was so weak that Daimler-Chrysler's

lawyers ridiculed it in public, on the record," Perens said. "Any other

outcome but dismissal would have been astonishing."

DaimlerChrysler did not answer requests for comment, but Rob Enderle, an

industry analyst with San Jose, Calif.'s Enderle Group, characterized SCO's

decision to sue DaimlerChrysler as one of the Utah company's "weakest

actions."

"The high burden of proof . . . made this an unwise path for SCO," he

added. "The outcome should not have surprised anyone and the appeal was a

waste of much needed financial resources."

In her original dismissal, Chabot rejected SCO's argument that

DaimlerChrysler had violated its SCO Unix contract by refusing to certify it

was not using Linux. 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.

Only one minor point of contention was left unresolved by Chabot last

July: whether DaimlerChrysler missed a 30-day deadline for responding to

SCO's initial demands.

SCO has three weeks to decide if it will ask the Michigan appellate

court to reconsider its upholding of Chabot's decisions.

bmims@sltrib.com