German investigation of Novell patent sale halted

Antitrust regulators have broken off a probe into Microsoft, Apple, Oracle and EMC's proposed purchase of 882 Novell open-source patents, as the companies have withdrawn a key filing

The German antitrust authority said on Wednesday that it is unable to investigate the establishment of a consortium set up to buy hundreds of open-source patents from Novell, due to the consortium members withdrawing their application in that country.

Novell patents Microsoft consortium

A German antitrust investigation into the purchase of Novell patents has halted, after the buyers withdrew their application. Photo credit: CNET News

Microsoft, Apple, Oracle and EMC filed a notification with the Bundeskartellamt (Federal Cartel Office) on 6 December, telling the competition authority that they intend to unify under the name of CPTN Holdings to buy 882 patents from Novell (not including the company's Unix copyrights). The filing was the first public identification of Microsoft's partners in the venture, which was announced in late November along with the $2.2bn (£1.4bn) sale of Novell to Attachmate.

On 30 December, CPTN Holdings withdrew its filing. Microsoft told ZDNet UK on Wednesday that this is "a purely procedural step necessary to provide time to allow for review of the proposed transaction".

A Bundeskartellamt spokeswoman said that the withdrawal means the German antitrust authority is unable to review the proposed transaction.

"There is no longer a case for us to decide on," the spokeswoman told ZDNet UK. "It is possible there will be a refiling of the case, but in the gap between withdrawing and a possible refiling, there is nothing for us to investigate."

The spokeswoman explained that the Bundeskartellamt ordinarily takes one month after a merger notification to decide whether or not to proceed with a full investigation. In the case of CPTN Holdings, the notification was withdrawn before this decision was possible.

Open Source Initiative
The withdrawal also came one day after the Open Source Initiative (OSI), an organisation dedicated to promoting open-source software, announced that it has submitted a letter to the Bundeskartellamt "requesting that they investigate this transaction thoroughly".

The OSI said it was "concerned that the proposed recipient of Novell's patent portfolio, CPTN, represents a serious threat to the growing use of open-source software throughout business, government, academia and non-profit organisations worldwide [as] the founders and leaders of CPTN have a long history of opposing and misrepresenting the value of open-source software".

Microsoft did not explain whose "review of the proposed transaction" the withdrawal was designed to allow and had not responded to a request for clarification at the time of writing.

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