SCO Must Produce Evidence of Alleged IBM Infringement

SCO Must Produce Evidence of Alleged IBM Infringement

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SALT LAKE CITY (AP) -- SCO Group's stock fell 8 percent Monday after a federal judge ordered it to produce evidence supporting its claim that IBM's version of the Linux operating system infringed on the Utah company's rights.

U.S. Magistrate Judge Brooke Wells gave the Lindon company until Jan. 23 to show where and how IBM's freely distributed Linux code misappropriated SCO's proprietary Unix code.

The charge is fundamental to SCO's March lawsuit against IBM seeking up to $50 billion in damages.

"IBM has said all along that SCO has failed to show evidence to back its claims," IBM spokesman Mike Darcy said Monday. "We are pleased that the court has indicated it will compel SCO to finally back up its claims instead of relying on marketplace fear, uncertainty and doubt."

SCO spokesman Blake Stowell said, "We definitely will provide that within the next 30 days, as the judge requested.

Stowell argued that SCO earlier had provided information about the alleged code misappropriations, but would now turn over extensively detailed evidence.

"We made claims we felt were pretty obvious to them, but they wanted us to be more specific, to go through and show specific lines of code in Linux ... right down to the brass tacks, so to speak," he said.

SCO's stock closed Monday at $15.27, down $1.32 from Friday's trading on the Nasdaq.

Investors also may have been skittish about SCO's decision to delay an earnings report scheduled for Friday. SCO said it would instead release fourth-quarter earnings on Dec. 22.

It cited the broadened accounting demands associated with its private placement of $50 million of Series A convertible preferred stock in October to, at least in part, cover costs of its Linux-related litigation.

The company insists the delay will not affect revenues still expected to range between $22 million and $25 million.

(Copyright 2003 by The Associated Press. All Rights Reserved.)

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