Networking Technology

Novell’s Final Betrayal: 800+ Patents to Microsoft - from The Source

Today Novell announced its final betrayal of Linux and the Free and Open Source Community:

Novell also announced it has entered into a definitive agreement for 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, which cash payment is reflected in the merger consideration to be paid by Attachmate Corporation.

Almost precisely as predicted back in May, Microsoft has organized a thin front organization to pick up whatever pieces they think will be useful against Linux. Novell, as has been standard practice for them since at least 2006, has once again chosen to do whatever is best for Microsoft.

In this case, it is selling some 882 patents for $450 million in cash, according to the SEC filing:

Also on November 21, 2010, Novell entered into a Patent Purchase Agreement (the “Patent Purchase Agreement”) with CPTN Holdings LLC, a Delaware limited liability company and consortium of technology companies organized by Microsoft Corporation (“CPTN”). The Patent Purchase Agreement provides that, upon the terms and subject to the conditions set forth in the Patent Purchase Agreement, Novell will sell to CPTN all of Novell’s right, title and interest in 882 patents (the “Assigned Patents”) for $450 million in cash (the “Patent Sale”).

The Patent Purchase Agreement contains representations and warranties of the parties, including with respect to Novell’s title to the Assigned Patents, existing licenses and rights with respect to the Assigned Patents, restrictions on rights to the Assigned Patents, the validity and enforceability of the Assigned Patents and the equity commitments of the members of CPTN to fund CPTN in an aggregate amount equal to or exceeding $450 million.

Business Insider has already captured the deal’s essence in a piece entitled “Today’s Novell Deal Helps Microsoft Continue Linux Fight“:

The deal helps Microsoft in its decade-long fight against open-source operating system Linux in two ways.

First, it keeps a Microsoft competitor from buying Novell’s SUSE Linux implementation. VMWare was looking at buying SUSE so it could sell a top-to-bottom software stack that would compete directly against Microsoft’s Windows Server and its built-in virtualization technology. This was a major fear in Microsoft’s server group, according to my sources there.

Second, although the companies didn’t say exactly what patents were included, it seems likely that some of them are related to SUSE Linux. If so, these patents will give Microsoft further ammunition to sign cross-licensing deals with companies that sell other products based on Linux. And those licensing deals will continue to raise questions in the mind of potential Linux customers.

Please note Business Insider is not some “freetard” blog. This is rational, business-oriented analysis. Remember that as Team Apologista winds up the spin and attempts to downplay the traitorous nature of this odious deal: the Patent Purchase Agreement portion of this deal is 100% beneficial to Microsoft in its fight against Linux. It strengthens Microsoft’s claims that it owns so-called “Intellectual Property” that entitles Microsoft  to demand licensing fees or other tribute in order for someone to run Linux.

Also note there are almost certainly other technologies and/or markets that Microsoft hopes to gain leverage in with these patents – but the essence is how much it bolsters Microsoft’s war chest against Linux. Don’t be distracted by claims that Microsoft has its eye on some other technology (ala Platespin). True as a side benefit, perhaps, but the real importance to Microsoft is – and has always been: to kill Linux, and, failing that, to hinder adoption of Linux, and, failing that, to require payment for the privilege of running Linux.

Questions that need answering

Which 882 Patents, exactly? Knowing which patents are in play here would go part of the way to predicting (and therefore defending) against future Microsoft claims against Linux.

What happens to any OIN patents? My impression is that the OIN “owns” the patents, so I don’t expect any change in those patents, but it would be re-assuring to confirm that.

What are the other companies in CPTN Holdings, LLC? I don’t doubt for a moment that this is 99.9999% Microsoft and .00001% Microsoft cronies assembled solely for this deal, but I’d still like to know more about the organization’s composition, history and activity.

Are there any anti-trust or other legal obstacles to the patent sale? In a logical world, Microsoft would not be able to both hold Linux up as a competitor (so as to deflect anti-trust criticism) and simultaneously attempt to extract licensing fees from use of their “competition”. However, what is legal and what is logical rarely meet, so let’s see if the regulators give this a once over and what they say. I don’t expect anything to come from this front.

What happens to Microsoft’s “Covenants”? Microsoft and Novell had some exclusive arrangements (which Novell loved to talk out of both sides of its mouth about). The Covenant to Downstream Recipients of Moonlight, for example, is specifically tied to Novell in a dozen places. The “special relationship” Novell enjoyed with Microsoft is mentioned in the SEC document, but nothing about it extending or continuing (or ending for that matter):

Information Regarding Certain Relationships

Novell and Microsoft are parties to a Business Collaboration Agreement, a Technical Collaboration Agreement and a Patent Cooperation Agreement that collectively were designed to build, market and support a series of new solutions to enhance the interoperability of Novell’s products with Microsoft’s products.

What happens to Mono? Miguel de Icaza is already trying to calm the waters, claiming “Mono continues as-is, but our paychecks will come from Attachmate instead of Novell“. I’d argue that changes are inevitable – that’s what happens when you get bought out; the new owners like to change stuff up – but I’m also interested in seeing if Microsoft will strike a no-sue secretive deal with Attachmate, so Team Mono can go on operating with the same cavalier attitude they did when with Novell.

I wouldn’t be surprised, because the Novell-Microsoft deal could not have been more beneficial to Microsoft: after years of dividing the FLOSS community and spawning a herd of “Open Source Advocates That Defend Microsoft” – Novell comes out the other end dead, Microsoft comes away with 880+ patents and a host of people promoting its technology and standards (both real and de facto) in the Open Source community. Why not see if they can continue that winning streak with Attachmate?

I guarantee you Miguel de Icaza and the rest of Team Apologista is up for it.

How will Team Apologista spin this? Mostly for the lulz factor, but I’m interested in seeing the spin. I suspect there will be two major lines of defense:

•Mono/OpenSUSE are Open Source, so they are “bigger” than who owns what. (Like Oracle buying Sun didn’t affect OpenOffice.org and Canonical has only minor influence on Ubuntu, I’m sure.)
•Microsoft is buying patents for defensive purposes. (Like the same patent can’t be used both offensively and defensively).
For additional lulz, one could note the jackholes that expressed such delightful schadenfreude when Oracle bought out Sun, aren’t crowing about Novell dying and selling nearly 900 patents to Microsoft on the way down.

Who is Attachmate? By this I mean we need to know more about Attachmate’s business strategy and philosophy. They say they will continue to support SUSE (and I assume, at this point, OpenSUSE) – so we will see. After checking out their site and searching Google, I don’t see anything that suggests Attachmate is pro-Open Source (or even interested in Open Source), so that is a bit troublesome. Still, I’ll reserve speculation on this point, because I need to know more about the company.