Linked by Roberto J. Dohnert on Tue 10th Jun 2003 01:06 UTC
On March 7th 2003, the SCO Group filed a lawsuit against IBM for misappropriation of tradesecrets and contractual agreements. The scope of SCOs complaint is that IBM introduced parts of Unix System V and Project Monterey into the Linux kernel. Project Monterey was a effort to port IBM's AIX 5L onto the Intel Itanium platform, IBM withdrew from that project for reasons unknown according to the press, I believe that it was because the Itanium is a bomb. 
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It's always legal for a company to distribute what it has the rights to. E.g. Microsoft doesn't have to pay itself licensing fees to use Access databases in its own products.