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Novell patent sale clears US regulatory hurdle

Novell's sale of hundreds of open-source patents to a consortium featuring Microsoft, Apple, Oracle and EMC has become more likely to go through, as the US Department of Justice has failed to block the sale.The antitrust division of the Department of Justice (DoJ) had made Novell and the consortium, CPTN Holdings, agree to not carry the sale through until 12 April, so the DoJ could review the sale.
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Written by David Meyer, Freelance reporter on

Novell's sale of hundreds of open-source patents to a consortium featuring Microsoft, Apple, Oracle and EMC has become more likely to go through, as the US Department of Justice has failed to block the sale.

The antitrust division of the Department of Justice (DoJ) had made Novell and the consortium, CPTN Holdings, agree to not carry the sale through until 12 April, so the DoJ could review the sale. In a filing with the US Securities and Exchange Commission (SEC) on Tuesday, Novell said that date had arrived "without action from the DOJ to enjoin the sale".

However, Novell pointed out that the DoJ could still challenge the sale of the patents under Section 7 of the Clayton Act "prior to or after any closing of the patent sale".

German antitrust authorities are still looking at the sale, though. That particular "waiting period" will expire on 26 April, Novell said. At the end of last year, the German Bundeskartellamt (Federal Cartel Office or FCO) had to scrap its upcoming investigation into the sale because CPTN unexpectedly withdrew its application to be registered as a consortium in Germany.

A second application came in March with altered terms. According to the Open Source Initiative's (OSI) telling of it — the group has been consulted by the FCO on the matter — "CPTN will now only exist for long enough to distribute the shares equally among the participants in the transaction (no more than three months), and thus will not form a new long-term patent troll itself".

"All parties to the transaction will retain a license to the full Novell patent portfolio, thus immunising themselves from patent actions with the shares they do not hold," the OSI said in the post on 7 April. "Microsoft will sell its 25 percent share of the patents on to Attachmate and retain only a license to the portfolio. EMC will ensure that the 31 patents it has determined relate to virtualisation are not among the 25 percent share it acquires. All patents will still be subject to all existing licenses, covenants not to sue and similar restrictions."

The OSI said it still had concerns about the sale, and had told the FCO as much.

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