IBM last week made its first significant response to The SCO Group's $1 billion lawsuit against it. SCO charges that IBM has stolen code from SCO's Unix operating system and used it to strengthen Big Blue's Linux server offerings.SCO says this has damaged the ability of its Intel-based SCO UNIXWare operating system to compete against Linux. While Linux server shipments have soared over the last few years, Unix as a whole - SCO included - is on the decline, according to many industry analysts. Meanwhile, IBM has invested more than $1 billion in building up Linux as an enterprise server platform.At the heart of SCO's complaint is the allegation that IBM used parts of its own Unix-based AIX operating system to strengthen Linux. Since SCO claims to own the rights to Unix System 7, the core technology on which many commercial Unix flavors are based - including AIX, SCO says - the company argues that its intellectual property was misused by IBM.Unix, which was developed by AT&T's Bell Labs in 1969, has been licensed widely to many vendors. In 1985, it was licensed to IBM, which sells Unix under its AIX brand. SCO obtained the rights to Unix from AT&T in 1995. SCO was acquired by Linux upstart Caldera in 1999, but the company renamed itself The SCO Group last year, and promised to make Unix patent enforcement a more prominent part of its business in January. (It wasn't making any money selling software).In the face of SCO's claims, IBM is taking the time-honored legal tactic - deny everything. And then some. IBM says that it has done nothing wrong, and that SCO's claims are baseless. Further, according to reports, IBM is saying that there is insufficient evidence to assert that several of SCO's claims to Unix ownership are true.IBM contests the notion that all Unix, particularly its Unix flavor, is a derivative of Unix System 7, and that SCO owns the rights to the code. Big Blue even calls into question the fact that AT&T invented Unix, or that IBM ever licensed Unix from Ma Bell in the first place - an interesting strategy for a firm with top-notch legal staff.