IBM appears likely to defeat SCO Group in the prevailing legal dispute over Unix copyrights allegedly used in Linux.

IBM has filed a counterclaim to the suit SCO threw against it last year. In it, IBM asks the Utah courts to enter a declaratory judgement in its favour, that it has not infringed SCO's copyrights and that IBM did not breach its contractual obligations to SCO.

The filing also asks the court to rule that SCO, which was at one time a Linux vendor, cannot impose restrictions on the software that it previously distributed under Linux's open-source software license.

By seeking a declaratory judgement, which a judge could issue as soon as the discovery process is over and before the case goes to trial, IBM appears to be indicating that has conducted an internal analysis of SCO's claims and has found them to be without merit, said Jeff Norman, an intellectual property partner with law firm Kirkland Ellis.

IBM major Linux vendor

"It just means that they didn't find any smoking gun. If they had found something really bad, they probably would have gone to SCO and talked settlement," Norman said.

It would be typical in a case like this for IBM to launch an internal investigation to determine whether or not any of SCO's claims were true, Norman said. This would involve interviewing and reviewing email and code contributions from IBM's Linux programmers, he added.

IBM has over 7,500 employees involved in various aspects of its Linux efforts, including more than 600 developers who work in the company's Linux Technology Centre.

IBM – SCO has no case?

Jeffrey Neuberger, a partner with Brown Raysman Millstein Felder & Steiner, agreed that the filing appears to show growing confidence on the part of IBM. "They're saying to the judge, 'We don't know what SCO is talking about; there is no infringement,'" he said. "They must feel very comfortable that there's no infringement."

Because IBM's filing seeks the broad judgement that IBM has not infringed on "any valid or enforceable copyright owned by SCO," a declaratory judgement in its favour would prevent SCO from bringing up new copyright claims later in the trial, and would have a devastating impact on SCO's case, Neuberger said.

"If the judge comes out and says there is no copyright infringement, then essentially there is nothing else to fight over. It would be the knockout blow to SCO's case," he said.

Representatives from IBM and SCO declined to comment on Friday's court filing.

Background to the case

SCO sued IBM in March 2003 claiming that it had violated SCO's Unix license, which was originally granted by AT&T but later transferred to SCO, and that it had illegally contributed source code to Linux. In February this year, SCO amended its complaint to include charges that IBM had violated its Unix copyrights. SCO wants $5 billion in damages in the case.

SCO claims Linux users do not have the right to use the Linux OS without a license from SCO because Linux violates its Unix copyrights.

"SCO's threats and its claims against IBM and other Linux users are meritless, and are simply part and parcel of SCO's illicit scheme to get Linux users to pay SCO for unneeded licenses to Linux," IBM said in its filing.

How much longer IBM and SCO will continue with the discovery stage of the case remains unclear. In a complicated case, the discovery process can last for years, Neuberger said.