IBM Files Countersuit Against SCO Group

IBM Corp. filed a countersuit against SCO Group Inc., escalating the fight over whether IBM and its clients need to pay SCO to use some key software codes. SCO shares dropped as much as 13%.

SCO claims Armonk, N.Y.-based IBM illegally transferred SCO-owned Unix computer codes into IBM’s version of Linux, a program IBM backs as an alternative to Microsoft Corp.’s Windows software.

IBM has denied any wrongdoing and is stepping up the legal battle to defend its ability to sell Linux and related programs. The world’s biggest computer maker started promoting the software in 2000 and has added more features to its Linux-based machines to make them attractive to businesses.

SCO shares fell 97 cents to $11.03 on Nasdaq. IBM gained 94 cents to $80.69 on the NYSE.