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

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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