Judge voids most SCO claims
A trial in The SCO Group's $5 billion lawsuit against IBM isn't set until February 2007, but the tiny Utah software company's case may have been dealt a crippling blow already.
In what SCO critics hailed Thursday as the courthouse equivalent of a prize fighter's jaw-crunching roundhouse right, U.S. Magistrate Judge Brooke Wells struck down two-thirds of the Lindon firm's claims in its suit alleging Big Blue leaked SCO's Unix code into the freely distributed Linux operating system.
Wells ruled that SCO had "willfully failed to comply" with repeated court orders to provide IBM with details supporting 187 of SCO's claims, in effect engaging in an evidentiary fishing expedition.
"It is almost like SCO sought to hide its case until the ninth inning in hopes of gaining an unfair advantage despite being repeatedly told to put 'all evidence . . . on the table,' " the magistrate wrote.
Wells dismissed SCO's arguments that, in essence, it needed access to IBM engineers to verify and detail its suspicions that IBM had illegally transferred SCO's intellectual property to the Linux community.
"SCO's arguments are akin to SCO telling IBM, 'Sorry, we are not going to tell you what you did wrong because you already know,' " the magistrate wrote.
Added Wells: "Certainly, if an individual was stopped and accused of shoplifting after walking out of [a store], they would expect to be eventually told what they allegedly stole. It would be absurd [to tell] the accused that, 'You know what you stole, I'm not telling.' "
SCO spokesman Blake Stowell acknowledged the ruling was a setback. "If two-thirds of your case is stricken, then it is a pretty serious matter. Our lawyers will determine how we proceed from here," he said.
However, Stowell argued that the remaining third of nearly 300 claims made by SCO still left the "foundation for a strong case." Ironically, specifics of many of those allegations are under seal to protect proprietary data.
Rob Enderle, Enderle Group chief analyst, said Wells' ruling was a solid defeat for SCO's use of a "quantity over quality approach to litigation strategy . . . . [Now] it will be vastly more difficult for them to get funding going forward as a result of the perceptions [stemming from] this decision.
"And they are burning through their cash reserves very quickly," he added.
Indeed, the ruling concluded a month of unpleasant news for SCO. Three weeks ago, the company reported that net losses for its most recent quarter had more than doubled to $4.69 million - largely because of nearly $3.8 million in new expenses related to its lawsuit against IBM.
An appeal would go to Wells' superior, U.S. District Judge David Kimball. He is already on record as having upheld a previous evidence-related ruling by Wells that SCO appealed.
IBM spokesman John Charlson would only say the world's largest computer company was satisfied to let Wells' decision speak for itself.
Leaders in the "open source" community, including developers of the free Linux software, were less reticent to comment.
"Without a doubt, this is a major blow to SCO," said Pamela Jones, creator and editor of Groklaw.net, an online Web site devoted to open-source software legal issues. "Being found willful [in failing to provide detailed allegations] is serious, because it indicates the judge is sick of their antics."
The decision, however preliminary, also is a boost for Linux, she said. "There has never been an operating system picked over with such care and determination to find fault. And Linux has come through utterly clean as a whistle."