The claim, part of a nearly 4-year-old suit alleging IBM released proprietary Unix code into the freely distributed Linux operating system, did not survive the scrutiny of U.S. Magistrate Judge Brooke Wells.
Neither SCO nor IBM would comment Friday on the ruling.
Wells' ruling came Thursday, just days before SCO faces what could be a critical hearing in a separate suit against Novell that could also mortally wound its case against IBM. Next Tuesday, U.S. District Judge Dale Kimball will hear Novell's motion for partial summary judgment contending that Unix rights SCO claims to own are actually still held by Novell.
If the court agrees, not only will SCO's "slander of title" claims against Novell evaporate, but the foundation for its IBM suit could be washed away.
The Lindon software company, despite being plagued by mounting losses, has spent tens of millions of dollars in court since first filing against IBM in March 2003.
Wells rejected SCO's argument that IBM programmers had destroyed potentially damaging code evidence soon after SCO filed suit, finding that the data was still available in existing IBM databases.
Last June, Wells hacked away two-thirds of SCO's nearly 300 claims, finding the Utah company had failed to comply with repeated orders to produce specifics on Unix code it claimed IBM had misappropriated into Linux.
Many observers saw the decision as a crippling blow to SCO's case; however, as recently as a Wednesday shareholders teleconference, CEO Darl McBride vowed to see the suit through to trial, expected late this year or early 2008.
SCO did prevail on another motion Thursday: Wells declined to allow IBM's attorneys to obtain the financial records of Jeffrey Leitzinger, one of the Utah company's witnesses.
SCO has largely blamed competition from Linux for the ongoing slide in its revenues and increasing operating losses. Earlier this week, the company finally acknowledged it had laid off 15 percent of its employees since October, leaving it with a workforce of 142, about 50 in Utah.
The acknowledgement came during questions that followed SCO's earnings report for fiscal 2006. The company's revenues tumbled 19 percent to $29.24 million, while net losses swelled 55 percent to $16.6 million.
