Microsoft-Backed Consortium Still After Novell Patents

A consortium headed by Microsoft is continuing in its plans to buy nearly 900 Novell patents for $450 million (£285m), according to reports.

That consortium, CPTN Holdings LLC, includes Apple, Oracle and EMC in addition to Microsoft. That company exists in the United States, having been registered on 4 November as a corporation in Delaware, as indicated by IT World and other publications. But according to PC World, CPTN apparently withdrew their plan application with the German Federal Cartel Office on 30 December, leading some open-source advocates to celebrate what they saw as a sure sign of the deal’s demise.

However, the plans to acquire the patents, many of which relate to open source, seem to be underway — despite protests from groups such as the Open Source Initiative (OSI).

Buying time

“This is a purely procedural step necessary to provide time to allow for review of the proposed transaction,” a Microsoft spokesperson wrote in an 11 January statement sent to TechFlash and other media.

Given the amount of code present in those Novell patents, open-source advocates are portraying the deal as potentially catastrophic for their interests.

“Whereas Novell was sincere in promoting and participating in open source software development and had an incentive to maintain their patent assets as a defensive portfolio, CPTN has all the motives and opportunity to do the opposite,” reads part of OSI’s position statement on the CPTN transaction. “CPTN creates a cover to launch patent attacks against open source while creating for each principal a measure of plausible deniability that the patent attack was not their idea.”

Attachmate acquisition

Swamped by financial troubles, Novell agreed in November to an acquisition by Attachmate Corp. for $2.2 billion (£1.4bn) in cash. At the time, Novell also indicated that it would sell a variety of intellectual property assets to CPTN.

In a November research note, Jefferies & Co. analyst Katherine Egbert suggested that Microsoft had its eye on Novell’s intellectual property “related to WordPerfect, which Novell acquired in the late 1990s, and through which Novell had sued Microsoft for anticompetitive behavior.” Microsoft had ended up paying the company several hundred million over several years.

Meanwhile, IDC analyst Matt Eastwood suggested that Microsoft could also be targeting Novell’s Platespin data-centre management and virtualisation technology, which can be leveraged in building out a private cloud-computing platform.

In any case, should CPTN complete its deal for those 882 Novell patents, trust that the open-source community will decry it for some time to come.