Decades-long Linux ownership dispute effectively dead after Xinuos appeal rejected — US Court of Appeals halts the legal wrangling over IBM’s and Red Hat’s use of Project Monterey UNIX code
Xinuos plans to petition for a full‑bench rehearing of its case, but this kind of request has only a 0.03% success rate according to IBM’s lawyers.
A decades-long dispute over the ownership of Linux looks like it is over. Earlier this month, the United States Court of Appeals for the Second Circuit rejected Xinuos’ continued claims that IBM and Red Hat improperly contributed jointly‑developed Project Monterey UNIX code to Linux, reports The Register. Despite this deathly blow to its chances of extracting potential damages from IBM and Red Hat, and oodles of Linux royalties and licensing fees, Xinuos intends to seek a full‑bench rehearing. This appeal is a very long shot for Xinuos, with only 0.03% of such hearings granted, according to IBM’s legal representatives in the dispute.
This is a complicated case that spans decades. So, to make sense of what has happened over the years, we’ve constructed a timeline of key events, spanning from way back in 1998 to the present day.
- 1998 Project Monterey. IBM partnered with a firm called Santa Cruz Operation (SCO), Intel, and Sequent to build a unified UNIX running on multiple processor architectures. SCO’s contribution was largely related to Intel x86 code.
- 1998-2001. Linux enjoyed rapid growth, so the importance of Project Monterey waned. IBM saw the shifting sands and moved its focus to Linux.
- Early 2000s. SCO first complained that IBM contributed jointly‑developed UNIX code to Linux without having proper rights to do so. Litigation began.
- 2003. SCO’s first major lawsuit was filed against IBM. It asked for billions of dollars due to the aforementioned complaint of IBM’s unauthorized use of UNIX code in Linux.
- 2011. Xinuos bought SCO’s UNIX business and IP.
- 2021. The SCO heir settled with IBM for $14.25 million. That’s a far smaller sum than it asked for in 2003, which kind of reflects SCO’s failure to produce convincing legal evidence.
- 2021. Xinuos sued IBM and Red Hat, claiming that IBM knowingly breached its non‑exclusive license by contributing Monterey code to Linux.
- 2022-2025. Xinuos argued that IBM’s actions amounted to licensing violations, but the U.S. District Court (SDNY) rejected this claim.
- August 10, 2026. Xinuos’ appeals are rejected. The U.S. Court of Appeals for the Second Circuit ruled that the case was too old to relitigate, and Xinuos framed it as licensing but was really arguing ownership, which is time‑barred. Thus the District Court dismissal stood.
- Now, August 2026. Xinuos has announced that it will petition for a full‑bench rehearing of its case. However, this is a long shot with a 0.03% chance of a rehearing being granted. According to IBM’s defense law firm.
While Xinuos looks like it has run out of road on its Linux code ownership claims, that’s probably good for the computing community. IBM, Red Hat, and the open-source world can probably now rest a little easier, with the shadow cast in 2003 now nearly entirely removed. Lingering uncertainty over Linux’s legitimacy is evaporating with the Second Circuit’s affirmation that the case is time-barred, and rather hollow, legally.
Other companies contributing code to open source projects can also rest a little easier as this distracting, resource-draining litigation grinds to a halt. Success for Xinuous may have also meant billions of Linux devices facing licensing uncertainty, maker settlements, audits, and/or forced software rewrites.
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Mark Tyson is a news editor at Tom's Hardware. He enjoys covering the full breadth of PC tech; from business and semiconductor design to products approaching the edge of reason.
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Darkhands Can't wait for this SCO crap to finally be over. I'm an old guy in his mid-40s and this has been going on for half my life.Reply
We need a universal fix for bad-faith lawsuits like this... Patent trolls, SCO, those scammers that go around suing 30 small-business restaurants at a time for minor ADA violations to squeeze settlements out of a percentage of them, it's all abuse of the legal system for profit. -
bit_user I'm not sure what hard evidence of this was found, but it was widely held that Microsoft (under then CEO Steve Ballmer) was the real driving force behind SCO's lawsuit. Ballmer made no secret of the fact that he regarded Linux as an existential threat to Microsoft. There were even stories of Microsoft employees getting fired for dabbling with Linux at home, on their own machines and their own time.Reply -
jabliese So many things the timeline missed. Check out the SCO lawsuit wikipedia page to get to the Groklaw internet archive, for more information than you ever wanted to know. Personally loved the "Who owns Linux?" side trip with Novell.Reply
bit_user, don't forget MS at the time was running Linux servers, just like everyone else. -
bit_user Reply
The ADA (Americans with Disabilities Act) thing is a completely different animal than patent law. It's like waaay out in left field. I mean, you might as well be talking about every other way that lawyers try to make money. Not to say there aren't potentially legitimate issues that could be discussed, but it's a completely different subject from IP law.Darkhands said:We need a universal fix for bad-faith lawsuits like this... Patent trolls, SCO, those scammers that go around suing 30 small-business restaurants at a time for minor ADA violations to squeeze settlements out of a percentage of them, it's all abuse of the legal system for profit.
Regarding IP law, most of the abuses fall in the domain of patent trolls. The SCO/Xinuos litigation differs in that it focuses on copyright violations. While those might seem very similar, patent and copyright are distinct fields of IP law and I have it on pretty good authority that lawyers usually specialize in one or the other. -
bit_user Reply
Source?jabliese said:bit_user, don't forget MS at the time was running Linux servers, just like everyone else.
I know that they inherited some FreeBSD servers, when they bought Hotmail. -
King_V Reply
This sounds vaguely familiar. I also have a recollection of some story where MS tried to switch Hotmail to running on Windows servers, and it went badly, so were forced to switch back.bit_user said:Source?
I know that they inherited some FreeBSD servers, when they bought Hotmail. -
Kicapan07 Reply2021. The SCO heir settled with IBM for $14.25 million. That’s a far smaller sum than it asked for in 2003, which kind of reflects SCO’s failure to produce convincing legal evidence.
I should note that above a certain of damages threhold (I think above $10,000 or something), you can can basically state whatever amount and it has very little bearing in what you ultimately get (judge/jury might even give you more in some cases though extremely rare). So usually plaintiffs asks for a extraordinary large number just to generate headlines.
What I'm saying is, we don't really know what their real initial target number is which would be internal.
I do find it likely that the article is correct that it's likely much smaller than what they initially hoped mainly due to how the other company did lose, but I'm just saying because the seeked damages is immaterial in US lawsuits, we can't use that as the benchmark of how far or how close they got to it in the settlement. -
bit_user Reply
I can't speak to this case, since it might indeed have been intended partly (or primarily?) as a way to scare away companies from using Linux.Kicapan07 said:So usually plaintiffs asks for a extraordinary large number just to generate headlines.
However, big damages claims aren't always about PR. Sometimes, it's really just about the money. I'm certain Zenimax vs. Facebook was about the money.
I'm sure $14.5M wouldn't cover the legal costs SCO and Xinuos incurred, over the lifetime of the case.Kicapan07 said:I do find it likely that the article is correct that it's likely much smaller than what they initially hoped mainly due to how the other company did lose, -
MobileJAD I am rather curios now just how different the world of Linux would be if SCO Unix did end up legally owning Linux way back then.Reply
Sure the entire battle could just be about money, but I'm wondering if things had played out differently, and one single entity ended up declaring "the judge ruled in our favor! We own Linux now!", would that have changed Anything for all of the non-buisness users out there who use Linux? Would the average Joe, who just wants a free OS for home use, that isn't Microsoft or Apple, have seen anything different play out? -
bit_user Reply
No, copyright only applies to the specific works (i.e. source code files) to which they had ownership claims, which was just a small minority of the kernel source code. I'm not sure whether SCO actually disclosed precisely which parts they were claiming, because I think early on they did not say. However, people who studied the matter figured it was just part of the network stack (or something like that - I'm foggy on the details).MobileJAD said:I am rather curios now just how different the world of Linux would be if SCO Unix did end up legally owning Linux way back then.
So, the outcome wouldn't have been SCO owning Linux. It would've been IBM & others owing SCO for the unauthorized use of their IP and then replacing that IP with clean room implementations. I think the clean reimplementations did happen anyway, just to avoid any future claims. I also seem to recall that Linux put in place a more strict IP policy, to minimize the chances of a similar incident happening again.