I've been following a couple of lawsuits between the company that used to be named Caldera (now called SCO) and a whole list of other companies: IBM, Novell, Red Hat, Autozone, and DaimlerChysler. Last Friday -- after the court refused to give SCO special permission to immediately appeal a ruling (instead of appealing at the end of the trial) -- SCO filed for bankruptcy.

SCO has sworn for years that if it can only get its case in front of a jury, it will prove that Linux infringes SCO's UNIX copyrights. The ruling that SCO wanted to appeal stated that SCO has very few UNIX copyrights, and apparently limited those copyrights enough that SCO realized Linux could not be considered to infringe on them in any way. A related ruling said that SCO's case had shrunk enough (due to summary judgements and voluntary dismissals) that SCO no longer had a right to a jury trial -- a judge would handle the trial instead.

A lot of things about this bankruptcy smell fishy. By filing for bankruptcy, SCO gets an automatic delay in the other trials that it started. It also throws the pretrial decisions into a legal limbo; the bankruptcy judge isn't required to follow them. One lawyer thinks its possible for SCO to get some money back from the lawyers it's paid. However, SCO has asked that its current lawyers be allowed to run the company for the time being.

Overall, I think that the bankruptcy is meant to pressure IBM, Red Hat and Novell into settling. SCO has $10 million in the bank. Novell was on track to get something around $30 million from its trial. Now everybody who SCO owes money to realizes that every dollar Novell gets is a dollar they don't get. The same goes for IBM and Red Hat's lawsuits. The negotiating table just got a lot larger.

The SCO-Novell lawsuit was over an agreement where SCO collected UNIX royalties and handed 95% of the money over to Novell. SCO stopped handing that money over a few years ago. I don't know what Novell will do next, but I do know if I were involved in the negotiations, I wouldn't accept any settlement where SCO continued to collect the royalties. However, by canceling that agreement, and by SCO's actions with regards to Linux, SCO would be left out in the cold without a software product to work on.