The Linux Ownership Saga Is Finally Running Out of Road
One of the longest-running legal embarrassments in tech history is inching towards its overdue conclusion. A three-judge appeals panel has ruled that claims against IBM and Red Hat don't hold up, and that the window for further action has well and truly closed.
To understand how we got here, you need to go back to 1998. IBM had a vision: a single UNIX capable of running across multiple processor architectures. To pull it off, Big Blue partnered with the Santa Cruz Operation, or SCO, which made an x86 UNIX variant. Intel and Sequent joined too. The project was called Project Monterey, and it was ambitious.
Then Linux happened. It already ran on multiple architectures, it had a completely different development model, and it made Project Monterey look like a very expensive waste of time. IBM pivoted accordingly.
As part of that pivot, IBM contributed some Project Monterey code to Linux. SCO, and later its various legal heirs, decided this meant they owned something valuable. Given that Linux now runs on billions of devices, you can see the logic, however shaky. For context: Huawei earns around $0.50 per device for its Wi-Fi 7 patents alone. Linux royalties, if you could actually claim them, would be a different order of magnitude entirely.
SCO spent years trying to prove its case and largely failed to produce the evidence needed to back it up. By 2021, one of its successors settled with IBM for $14.25 million, which is the kind of figure that tells you everything about how convincing the original claims were.
Another successor, Xinuos, took a different angle. Their argument was that IBM knew it only had a non-exclusive licence to use the Project Monterey code, not ownership of it, and that contributing it to Linux breached that licence. It's a subtler framing than the blunt ownership claims that came before.
Subtler, but still not good enough. The US District Court for the Southern District of New York found no case to answer. Xinuos appealed, and on 10 August the US Court of Appeals for the Second Circuit upheld that decision. The court agreed the original Project Monterey agreements meant the matter was out of time, and also noted that Xinuos had tried to dress up an ownership dispute as a licensing argument, which didn't wash.
There is one last roll of the dice. Xinuos intends to petition for the full bench of the Court of Appeals to rehear the case. Don't hold your breath, but don't quite write the obituary yet either.