Microsoft gets Novell's Patents rights but must share them with Open-Source Software

Microsoft gets Novell's Patents rights but must share them with Open-Source Software

Summary: This is not the deal Microsoft wanted, but it's what the Department of Justice insisted on.

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Well, this is almost certainly not the Novell patent deal that Microsoft and its CPTN Holding Partners-Apple, EMC and Oracle-wanted . The U.S. Department of Justice (DoJ) announced today, April 20th, that in order to proceed with the first phase of their acquisition of certain patents and patent applications from Novell, CPTN Holdings has altered their original agreements to address the department's antitrust concerns. In particular, "The department said that, as originally proposed, the 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. Although the department will allow the transaction to proceed, it will continue investigating the distribution of the Novell patent to the CPTN owners."

According to the DoJ, which worked in concert with the Germany's Federal Cartel Office (Das Bundeskartellamt), "CPTN and its owners have revised their agreements to provide that:"

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 [Which owns VMWare] 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; and

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.

As it happens, the OIN, an organization designed to protect Linux and open-source software with a shared patent pool, announced today that its membership has vastly increased in recent months. In a statement, the OIN said that "In the first quarter, OIN experienced 28% growth in its community of licensees , boosting the community to 334 corporate supporters. OIN licensees … benefit from leverage against patent aggression and access to enabling technologies through OIN's shared intellectual property resources." To be exact, "Patents owned by Open Invention Network are available royalty-free to any company, institution or individual that agrees not to assert its patents against the Linux System."

These are not just small companies. New members of the OIN include Facebook, Fujitsu, HP, Juniper, and Rackspace.

So, no matter what Microsoft may have in mind, the Novell patents will be under both GPLv2 and OIN protection. Indeed, Microsoft won't even own Novell's patents, but instead will only license them. Even before these changes in the deal were announced, I was told by an OIN representative that, "Regarding Novell: If a company is a member/licensee of OIN prior to the closing on the Attachmate deal, then, they will be covered in perpetuity on all relevant Novell patents. All companies signed on as an OIN licensee prior to the closing, will receive the benefit of the license to those patents."

I strongly suspect that's why so many major companies joined up with the OIN. Now, though, it appears to me, that OIN members who come aboard after the Attachmate/Novell deal is done will also be covered.

So what does it all mean? Andrew "Andy" Updegrove, founding partner of Gesmer Updegrove, a top technology law firm, said, "This is a rather breath-taking announcement from a number of perspectives. Among others, the granularity of the restrictions imposed demonstrates a level of understanding of open source software in general, and Linux in particular, that has not been demonstrated by regulators in the past. It also demonstrates a very different attitude on the part of both the U.S. and German regulators, on the one hand, and Microsoft, on the other, from what we saw the last time that Microsoft was under the microscope. In the past, Microsoft was more disposed to fight than negotiate, and the U.S. and the European Commission were far apart in their attitudes. This announcement conclusively places open-source software on the U.S. regulatory map."

Even though the CPTN companies have agreed to the deal, don't think that the DoJ isn't going to pay attention how Microsoft and friends use those patents. In the statement, Sharis A. Pozen, Deputy Assistant Attorney General of the Justice Department's Antitrust Division, said, "The parties' actions address the immediate competitive concerns resulting from the transfer of Novell's patents. To promote innovation and competition, it is critical to balance antitrust enforcement with allowing appropriate patent transfers and exercise of patent rights. Although we recognize that the various changes to the agreement recently made by the parties are helpful, the department will continue to investigate the distribution of patents to ensure continued competition."

With these objections out of the way, I anticipate that the Microsoft-sponsored purchase of Novell by Attachmate will soon be completed.

Related Stories:

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

Microsoft Patent Case in the Supreme Court's Hands

Novell's Stockholders approve Attachmate buyout but the Deal's far from done

Novell shares more specifics on patents it is selling to Microsoft, Apple

Topics: Security, Legal, Microsoft, Open Source, Software

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  • RE: Microsoft gets Novell's Patents rights but must share them with Open-Source Software

    This is good for all parties involved.

    Hooah!
    daikon
  • RE: Microsoft gets Novell's Patents rights but must share them with Open-Source Software

    This news made my day. MS and Apple's actual nature outed and their bastard plans stopped dead in their tracks AND there's signs that key people in charge of patents are finally getting a clue.
    neilcoo
    • RE: Microsoft gets Novell's Patents rights but must share them with Open-Source Software

      @neilcoo
      Nice comment.

      Hooah!
      daikon
    • MS and friends are the clear winners here

      @neilcoo
      Tey get what they wanted, use of the patents in [b]proprietary[/b] software, but for free.

      How is tha a win for FOSS, who's stipulation is that they can use them as long as MS, Apple, ect open their software up for free?
      Will Farrell
      • RE: Microsoft gets Novell's Patents rights but must share them with Open-Source Software

        @Will Farrell because those companies cant use those patents against the FOSS community....
        nickdangerthirdi@...
      • But as it was pointed out on another blog about this

        @nickdangerthirdi

        that I doubt that MS and the other companies could have held them against FOSS. For those using it now, they likely had signed a clause that granted them use of those patents no matter what or who purchased them in the future.

        All CPTN could do with these patents would deny, or charge, for use of the patents to new licensees, and to have use of the patented ideas in their proprietary software, something the patent owners are allowed to do with them, no matter what the seller may have done with them in the past.
        John Zern
      • @John Zern

        "The department said that, as originally proposed, the 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. Although the department will allow the transaction to proceed, it will continue investigating the distribution of the Novell patent to the CPTN owners."<br><br>Well they obviously haven't signed any such clause otherwise the DoJ would not have felt the original agreement could hinder the progress of the open source community as shown in the quote from the article above. <br><br>Let's face it, the only things that could get MS, Oracle and Apple to shake hands would be an agreement that allows them sue their competitors out of the playing field. This is coming from someone who actually likes Apple in general, but I have no doubt they would use any opportunity the legal system grants them to kill competitors.
        anono
      • GPL V2 ??? WOW, that's a killer.

        Microsoft and Apple can use them, but only under the terms of the license. In specifying THIS license (rather than, for example BSD), Microsoft is unable to "embrace and extend" the patent-covered IP in a proprietary way. So, a strategy like Kerberos, in which Microsoft made their use of the core specification "secret and proprietary", won't work:

        If the do something to the implementation of the covered IP, then they have to release what they did under the terms of the GPL: Source code to anyone who wants it, and offers to comply if/when THEY create changes as well.

        And so, Microsoft and Apple are forced to implement proprietary code separately from the patent-covered, GPL-licensed, "eye-pee". The Proprietary software must use the patents in question via *PUBLIC* APIs. If Microsoft wants to change any of that GPL-licensed code (introducing a new function, or changing an old one, then they must make their SOURCE CODE changes available to anyone who asks for them.

        It's a huge limitation on Microsoft's traditional strategy of creating "new", secret versions of communications protocols, file formats, and storage schemes to make "competitors non-competitive.
        Rick S._z
  • RE: Microsoft gets Novell's Patents rights but must share them with Open-Source Software

    Looks like Microsoft got the best deal here. They can't be sued by OIN or Attachmate or any other linux company. They are feeling good right about now knowing that. Prepare to see the innovation from Microsoft start to come out and nothing linux guys can do about it.
    Loverock Davidson
    • RE: Microsoft gets Novell's Patents rights but must share them with Open-Source Software

      @Loverock Davidson

      I wait with baited breath for Microsoft Innovation. I wait, and I wait and I wait.

      Purchasing companies that have innovated does not count.
      fwarren
      • RE: Microsoft gets Novell's Patents rights but must share them with Open-Source Software

        @fwarren
        He did say; Prepare to see the innovation from Microsoft start to come out.
        daikon
    • @Loverock Davidson

      First of all, I don't remember a linux company ever suing MS. Second, I don't see anything to benefit MS in the amended agreement over the original. Third, even if I missed something, then Apple, Oracle, Microsoft and EMC benefits, not just MS. Funny how prolonged worship can make you blind to facts.
      anono
      • RE: Microsoft gets Novell's Patents rights but must share them with Open-Source Software

        @anono
        The Linux community prefers to invest time and effort into innovate than with lawsuits that are a waste of time and money. Because of the effort in providing better products for free we prefer not to get into the middle of your "own battles" for innovation. We wish to be left in peace so we can use our time and team work on developing better solutions. Isn't this a good explanation?
        jptferreira
  • The subject-to-GPL part is unclear

    One of the requirements relates to the GPL and I'm not sure this precludes the new owners of those patents from collecting royalties on GPL'd software. In a different context (procurement policy) the European Commission also made it clear that royalty-bearing deals can be structured in open source-compatible ways:
    http://fosspatents.blogspot.com/2011/04/us-department-of-justice-announces.html
    FlorianMueller
    • RE: Microsoft gets Novell's Patents rights but must share them with Open-Source Software

      @FlorianMueller <br>It appears that the free world gets a GPL license and Microsoft gets a commercial license. The same patents will be licensed to two different licensees in two different ways. More interestingly, it appears that Microsoft is paying money merely to get a license of Novell's patents -- perhaps meaning that Microsoft is actually more worried about the possibility that Microsoft itself is infringing on UNIX and other Novell technologies than it is about buying more patents so that it can attack Linux for infringement.
      Walt_z
      • RE: Microsoft gets Novell's Patents rights but must share them with Open-Source Software

        @Walt_z I suspect you're right. Linux used a lot of Windows GUI aspects in KDE and Gnome...But Linux is also the reason for Windows new found stability...Microsoft similarly incorporated a lot of Linux concepts into Vista and Win 7 to fix stability issues in DOS OS while keeping the best aspects of the Windows GUI. Had the Linux foundation had reason to do so, they could have hit Microsoft with an IP suit, but MS could have gone after them too. Now they can't and the two companies have been somewhat brought on an equal playing field that will hopefully keep them out of the courts. It wasn't a bad decision for everyone involved.
        Socratesfoot
      • RE: Microsoft gets Novell's Patents rights but must share them with Open-Source Software

        @Walt_z Microsoft has had licensing deals on that particular portfolio for years, who do you think was funding Novell's defense of those patents when they were fighting SMB. This new deal was about Novell's last assets being put up for sale, you do notice don't you that it is a consortium of companies involved in the purchase not just Microsoft. The license for these companies means that these companies can create proprietary hardware and software and not share the source with the Open Software people. These patents are already present in a wide range of products and Microsoft and the others are just protecting their property.
        Rndmacts
      • RE: Microsoft gets Novell's Patents rights but must share them with Open-Source Software

        @Walt_z
        Rndmacts says that Microsoft has had licensing deals on the Novell portfolio for years, but I think all they had was an agreement by Novell not to sue Microsoft customers; I don't remember an announcement that they had licensed hundreds of patents to Microsoft or even that they had agreed not to sue Microsoft itself. If that's correct, someone other than CPTN who bought the Novell patents might have sued Microsoft.

        Second, I generally agree with Rndmacts second point. Although it appears that anyone will be able to use the patents under an OIN license, CPTN will separately get a commercial license -- presumably covering any future proprietary improvement they make to any of the licensed patents.
        Walt_z
    • RE: Microsoft gets Novell's Patents rights but must share them with Open-Source Software

      @FlorianMueller I suspect you're right. Linux used a lot of Windows GUI aspects in KDE and Gnome...But Linux is also the reason for Windows new found stability...Microsoft similarly incorporated a lot of Linux concepts into Vista and Win 7 to fix stability issues in DOS OS while keeping the best aspects of the Windows GUI. Had the Linux foundation had reason to do so, they could have hit Microsoft with an IP suit, but MS could have gone after them too. Now they can't and the two companies have been somewhat brought on an equal playing field that will hopefully keep them out of the courts. It wasn't a bad decision for everyone involved.
      Socratesfoot
      • RE: Microsoft gets Novell's Patents rights but must share them with Open-Source Software

        @Socratesfoot

        DOS OS what are you in the 90's windows uses the Nt kernel not Dos and have you seen KDE lately it looks like a total ripoff of windows aero and aero came first... i believe....
        Viper589