Microsoft-backed CPTN alters Novell patent acquisition terms to appease antitrust authorities

Summary:Microsoft and other members of the CPTN Holdings group that is attempting to acquire more than 800 Novell patents are altering their original agreements to head off potential antitrust concerns, the U.S. Department of Justice (DOJ) on April 20.

Microsoft and other members of the CPTN Holdings group that is attempting to acquire more than 800 Novell patents are altering their original agreements to head off potential antitrust concerns, the U.S. Department of Justice (DOJ) on April 20.

Last November, Seattle-based Attachmate Corp. announced plans to buy Novell for $2.2 billion. At the same time, Novell announced the “concurrent sale of certain intellectual property assets to CPTN Holdings LLC, a consortium of technology companies organized by Microsoft Corporation, for $450 million in cash.” Microsoft officials originally refused to divulge which other companies were part of CPTN, but it came to light that the CPTN group also included Apple, EMC and Oracle.

Antitrust flags were raised almost immediately about the terms of the deal, and both the U.S. DOJ and the German Federal Cartel Office began investigations.

"As originally proposed, the (CPTN) deal would jeopardize the ability of open source software, such as Linux, to continue to innovate and compete in the development and distribution of server, desktop, and mobile operating systems, middleware, and virtualization products," said the DOJ in a statement today. "Although the department will allow the transaction to proceed, it will continue investigating the distribution of the Novell patent to the CPTN owners."

Today's press release from the DOJ explained the new requirements:

  • Microsoft will sell back to Attachmate all of the Novell patents that Microsoft would have otherwise acquired, but will continue to receive a license for the use of those patents, the patents acquired by the other three participants and any patents retained by Novell
  • EMC will not acquire 33 Novell patents and patent applications that have been identified as related to virtualization software
  • All of the Novell patents will be acquired subject to the GNU General Public License, Version 2, a widely adopted open-source license, and the Open Invention Network (OIN) License, a significant license for the Linux System
  • CPTN does not have the right to limit which of the patents, if any, are available under the OIN license
  • Neither CPTN nor its owners will make any statement or take any action with the purpose of influencing or encouraging either Novell or Attachmate to modify which of the patents are available under the OIN license.

Under the CPTN plan, the four companies in the cartel planned to buy the 882 patents in question in a two-stage transaction. First, CPTN would acquire the patents and applications, then the patents would be allocated and distributed to each of the four companies.

Topics: Security, Legal, Open Source, Software

About

Mary Jo Foley has covered the tech industry for 30 years for a variety of publications, including ZDNet, eWeek and Baseline. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008). She also is the cohost of the "Windows Weekly" podcast on the TWiT network. Got a tip? Se... Full Bio

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