He added that he agrees with concerns held by SCO, and Microsoft, that contractual terms for Linux designed to keep it free -- known as the General Public License -- can undermine ownership rights of software that might be used in the same network environment.

'This Sucking Effect'

Under this view, software that is enhanced to work in conjunction with Linux might be labeled a Linux derivative, which the public license then requires to be distributed for free.

"The GPL has this sucking effect of grabbing your IP [intellectual property], sucking it in and destroying your property rights," McBride said.

Torvalds, the Linux founder, ridicules that notion.

"Having a hole in your head has this sucking effect," Torvalds said, firing back at McBride. "The GPL doesn't 'grab' any IP at all. The only thing that is desperately trying to grab other people's IP is Darl McBride and company."

Still, some Linux advocates such as Bruce Perens, former open-source strategist at Hewlett-Packard, say the GPL has some "ambiguities." But Perens argues these are easily resolved. An even bigger assault on Linux looms, he fears, through the assertion of patent rights by big software firms.

If any company were to worry about threats to intellectual property, it would be IBM, which holds more patents than any other firm in the world. But the company has staked a portion of its business on Linux, selling services and add-ons to other companies and institutions.

IBM officials declined to comment on the lawsuit. The company said that it has had no problems working with all types of licenses.

"If you understand and adhere to the terms and conditions, you can work with the software," said IBM spokeswoman Trink Guarino.

In its lawsuit against SCO, Red Hat -- the country's largest Linux distributor -- has asked a judge to declare Linux free of infringed code. Meanwhile, organizations such as the National Retail Foundation have issued statements that, based on their research, SCO's clams are groundless.

As for SCO, it has had a rocky past few weeks. Its stock, which soared when it began its lawsuit campaign, has since dropped dramatically.

More recently, the Royal Bank of Canada dropped out of the picture, selling two-thirds of its stake to BayStar and converting the remaining $10 million into SCO stock, which it can sell on the open market.

Initially, BayStar also sought a refund of its investment, which could have stripped SCO of much of its cash.

"We do not like to be in the public forum," Goldfarb said. "We were not happy with what we thought was a cavalier attitude [by SCO management] . . . in dealing with investor relations and the press. This is an issue of grave importance."

But recently, BayStar said it was satisfied with SCO management.