(Wired News) SAN JOSE, California — IBM retaliated in court Thursday against claims by the SCO Group that it gave away proprietary code to developers of the Linux operating system.

IBM sought dismissal of SCO’s original suit, alleging that the Utah company made false allegations, competed unfairly and infringed on IBM patents. The countersuit seeks unspecified compensatory and punitive damages.

SCO claims to own the rights to key elements of the Unix operating system, which has been licensed to thousands of companies, including IBM.

In a $3 billion suit it filed against IBM in March, SCO alleges that IBM transferred code from its AIX version of Unix to Linux.

The open-source Linux operating system is developed by an international network of programmers who share software code. It can be obtained for free, making it popular with companies looking to cut costs. Linux competes with Microsoft in the market for server software for managing computer networks.

In the 45-page filing in Utah federal court, IBM asserts 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 also accuses SCO of violating the GNU General Public License under which Linux is distributed.

A SCO spokesman had no immediate comment on the counterclaims.

IBM’s action followed SCO’s unveiling of terms of its controversial plan to seek licensing fees from companies using Linux. SCO has sent letters to 1,500 companies regarding their use of the operating system, according to the suit.

Bob Samson, IBM’s vice president of systems sales, said in a memo to customers that “SCO’s scheme is an attempt to profit from its limited rights to a very old Unix operating system by introducing fear, uncertainty and doubt into the marketplace.”

IBM’s countersuit is more likely to push the two companies toward a settlement because IBM included the four patent-infringement claims, which carry hefty legal fees, said Brian Ferguson, an intellectual property lawyer with McDermott, Will & Emery in Washington, D.C.

“IBM now has offense and claims that they can assert against SCO that are really going to force SCO to consider lowering its asking price in any settlement,” Ferguson said.

In addition, SCO is facing a lawsuit from Raleigh, North Carolina, Linux distributor Red Hat. It filed a formal complaint Monday in Delaware seeking to stop SCO from making claims that would harm its Linux business.

“I think this was a real bad week for SCO,” Ferguson said.

SCO’s battle with Big Blue has been brewing for some time. In June, SCO terminated the Unix license of IBM, which maintains the license is perpetual and continues to sell machines that run both Unix and Linux.

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

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

Shares of IBM gained 61 cents to $80.36 in Thursday trading on the New York Stock Exchange. SCO shares fell $1.39, or more than 11 percent, to $10.61 in afternoon trading on the Nasdaq Stock Market.

AP and Reuters contributed to this report.