IBM Corp. has fired back at the SCO Group Inc., saying the small Utah company’s claim that IBM gave away proprietary code to the Linux operating system is false and should be thrown out of court.

In a countersuit filed Aug. 7, IBM also accused SCO of unfair competition and infringement of Big Blue’s patents. The countersuit seeks unspecified compensatory and punitive damages.

SCO, which sued IBM in March, claims to own the rights to key elements of the Unix operating system, which has been licensed to thousands of companies, including IBM. In its $3 billion suit against IBM, SCO alleges that Big Blue transferred code from its AIX version of Unix to Linux, which is developed by thousands of programmers worldwide.

A cloud of legal uncertainty has enveloped Linux since SCO filed its breach-of-contract lawsuit against IBM. Though the suit itself relates to how IBM distributed its version of Unix, SCO’s claims raise questions about the essence of the open-source movement that has evolved on the notions that software code should be fully exposed and freely distributed rather than secret and proprietary, as Microsoft’s programs chiefly are.

Linux is distributed under the GNU General Public License, which leaves users–not distributors–liable for any intellectual property issues that might arise. As a result, the growing community of Linux users–which includes many schools and universities–has been watching the legal battle unfold with concern. (See “SCO throws a legal scare at Linux users,”

In its response to SCO’s challenge, IBM asserts that SCO devised a “campaign of falsehoods” that creates “the false impression that SCO holds the rights to Unix that permit it to control not only all Unix technology, but also Linux.”

IBM took issue with SCO’s attempts to generate licensing revenue based on alleged infringing code, which SCO has refused to publicly identify.

IBM also accused SCO of violating the GNU General Public License under which Linux is distributed. Until recently, SCO had distributed its own version of Linux that contained allegedly misappropriated code.

In a statement, SCO called IBM’s action an attempt to “distract attention from its flawed business model.” SCO issued a similar statement three days earlier after leading Linux distributor Red Hat Inc. sued the company for “unfair and deceptive actions.”

IBM’s countersuit also claims that SCO violated “no fewer than four” of IBM’s patents in its UnixWare operating system and other products.

But SCO said IBM’s patent claims are the first time the issue has been raised, even though some of the allegedly infringing products have been shipping for nearly two decades.