The SCO corporation, a Park City, Utah based software company, announced on May 14th, 2003 that Linux had pieces of Unix code in it, and that they would suspend the selling of its Caldera Linux, warn IT companies of the risks associated with Linux, and start a lawsuit against IBM.
As can be believed, this has not endeared SCO to the Linux community. It seems like a very cynical ploy by a company without a real niche to raise money the old fashioned way...by harrassing people. The fact that Microsoft decided to license Unix from SCO the next week suddenly seems to be non-coincidental. It seems that SCO is either trying to raise money by being a pawn for Microsoft against Unix, or is trying to get IBM to take them over, to avoid the annoyance of a years long lawsuit.
But whatever the strategy behind the lawsuit, the merits of the case in itself raise questions. As RMS has pointed out, since SCO has released its own Linux under the GPL, it has made it open source whatever its origin was. On top of that, the Linux code is not exactly hidden, it has been broad knowledge for the past ten years, at least. And there are certainly many people who have access to propietary Unix code who have looked at the Linux code, many of whom would probably have reasons to raise intellectual property questions, yet this is the first time it has been brought up. Why haven't IBM, or Hewlett Packard, or Sun Microsystems brought this up before? I am sure that in the entire Linux kernel code, there are probably some lines of convergent code, but I think a smoking gun would have been noticed before, unless there is a gigantic conspiracy of silence.
However, as they say on the net, IANAL, and I am not a programmer, either. As Linus himself has commented on the case, it will be in the details. We can only hope that this will be resolved before too many people get hurt.