A US appeals court has dealt what looks like a near-fatal blow to a long-running legal dispute over the ownership of code within Linux, ruling that a claim brought by SCO successor Xinuos against IBM and Red Hat is invalid and time-barred. The case traces back to a failed 1998 partnership called Project Monterey, in which IBM worked with the Santa Cruz Operation, Intel and Sequent to build a multi-architecture version of UNIX, only for the effort to be overtaken by Linux; IBM subsequently added some Project Monterey code to Linux, prompting SCO and its successors to claim ownership rights over that code, and by extension leverage over Linux itself, which runs on billions of devices worldwide.

The US Court of Appeals for the Second Circuit ruled on 10 August that it would not revisit a lower court decision rejecting Xinuos's claim, agreeing that the terms governing Project Monterey mean it is now too late to relitigate the matter, and that Xinuos had mischaracterised what was really an ownership dispute as a licensing issue. This follows a 2021 settlement in which an SCO heir accepted $14.25 million from IBM after years of weak evidence. Xinuos now plans to petition for a rare full-bench rehearing, though such requests are seldom granted, suggesting the decades-old dispute may finally be nearing its end.