Judge green-lights $5bn SCO lawsuit

A judge has accepted the SCO Group's changes to a lawsuit against IBM that now seeks $5bn in damages for Big Blue's alleged moving of Unix intellectual property into Linux.

Because IBM didn't oppose SCO's motion to amend its claims - a motion that was "subject to IBM's right to move against the amended pleadings" - Magistrate Judge Brooke Wells accepted SCO's new legal attack, he said in a filing Wednesday in the US District Court in Utah.

The second amended complaint drops SCO's claim that IBM misappropriated trade secrets, but adds a charge of copyright infringement. SCO seeks $1bn in damages for unfair competition and $1bn for each of four allegations of breaching various contracts by which SCO licensed Unix to IBM and a company Big Blue acquired, Sequent.

When SCO's suit against IBM began, in March 2003, it sought more than $1bn in damages. In April, an amendment to the suit raised the figure to $3bn.

"The amount is starting to become breathtaking," said John Ferrell, an intellectual property attorney at law firm Carr & Ferrell, referring to the damages SCO and its attorney, David Boies, are seeking.

Linux is a close relative to Unix and works identically in many ways, but Linux is open-source software that may be obtained and modified freely, whereas Unix is closed and proprietary. SCO argues that IBM illegally moved Unix technology to Linux, technology it was required to keep secret.

The suit has galvanized the computing industry, which has embraced Linux warmly. The suit doesn't appear to have thwarted Linux enthusiasm: revenue from Linux server sales jumped 63 percent to $960m in the fourth quarter of 2003, according to research firm IDC.

The lawsuit is one of three SCO is fighting over the issue of Unix and Linux. The company also sued Novell, a recent Linux convert and a prior owner of the Unix technology, over Novell's assertions that it still owns Unix copyrights.

And Red Hat, the leading seller of the Linux operating system, filed a suit seeking a declaration that the company didn't violate SCO's copyrights or trade secrets.

More legal wrangling is expected. SCO said it will sue Linux users as well, though it missed a mid-February deadline.

Stephen Shankland writes for CNET News.com