Red Hat's case against SCO put on hold

In a mixed ruling Tuesday, a federal judge has denied SCO's motion to throw out a suit brought by Linux seller Red Hat but has put the case on hold, awaiting an outcome in a related case between IBM and SCO.

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Red Hat sued SCO in August, seeking a judgment that Red Hat's sales of Linux have not violated any of SCO's copyrights or trade secrets relating to Unix, the operating system on which Linux is modeled. In September, SCO countered that the case should be dismissed, because the company's legal actions haven't targeted Red Hat.

"SCO's conduct has created a reasonable apprehension of suit," said Sue Robinson, chief judge in the ruling for the U.S. District Court in Delaware. "SCO has publicly stated that it has issues with Red Hat."

But she thwarted Red Hat's attempt to put a swift end to the SCO case. It would be "a waste of judicial resources" to have two courts simultaneously handling cases about whether Linux contains misappropriated Unix source code, Robinson said, staying the case until there is a resolution to the IBM-SCO case.

Red Hat declined to comment for this story. SCO spokesman Blake Stowell said the company was disappointed the case wasn't dismissed but said it now will be able to concentrate its energies on its remaining legal actions.

The IBM case is scheduled to go to trial April 11, 2005. However, SCO on Monday asked that the trial be pushed back to Sept. 15, 2005.

SCO attorneys argued in a motion that they have 10 IBM counterclaims to reckon with, that the evidence discovery process was delayed for months, and that "IBM's untimely responses to discovery have hindered orderly prosecution of the case." IBM declined to comment immediately.

SCO and its attorneys, the high-profile firm of Boies, Schiller & Flexner, still has four major cases to grapple with: the original suit, accusing IBM of breaching contracts and violating copyrights by moving Unix technology to Linux; a suit against earlier Unix owner Novell, rebutting claims that Novell still owns Unix copyrights; a suit against former SCO customer AutoZone, asserting that its use of Linux violates Unix copyrights; and a suit against Unix licensee and Linux user DaimlerChrysler, asserting that the carmaker violated its Unix contract obligations to say how much Unix it's using.

Linux booms
The cases have raised some concerns about Linux, an open-source operating system initially created by volunteers worldwide and later boosted by help from most of the world's largest technology companies, but its adoption continues to surge.

Linux server sales boomed 63 percent to $960 million in the fourth quarter of 2003. And Red Hat Chief Executive Matthew Szulik told financial analysts in March that "We saw no decrease in demand because of lawsuits." He also noted that the company signed up 4,000 new customers and 87,000 new subscriptions to pay for its Red Hat Enterprise Linux software.

Linux programmers vehemently oppose SCO's actions. At a Novell conference two weeks ago, Linux founder and leader Linux Torvalds flatly rebutted SCO's claims. "There's no Unix in Linux," he told show attendees.

But Torvalds is uneasy about another intellectual-property area: "The things that tend to worry me are things like software patents, where nontechnical issues can be used to stop developers, to stop people from doing what they want," Torvalds said.

Novell, which became the No. 2 Linux seller with its $210 million acquisition of SuSE Linux in January, offers customers some legal protection against copyright infringement. But at the show, Novell Chief Executive Jack Messman said patent protection is "a more difficult area to provide indemnification for...My guess is we will not do that, because the exposure is much greater."