Regulator says Microsoft Must Sell Back Novell Patents

Microsoft will sell patents it proposed to buy from Novell back to Attachmate, which is in the process of acquiring Novell, under a deal with the US Department of Justice (DoJ) concluded last week.

Novell had originally proposed to sell a number of patents to CPTN Holdings, a Microsoft-organised consortium of companies whose owners also include Apple, Oracle and EMC, with the patents then to be distributed among the consortium’s members.

Competition fears

The arrangement with the DoJ was reached in order to satisfy concerns about how that move would have affected the ability of CPTN Holdings’ owners to to suppress competition from open source software. Novell distributes the open source SuSE Linux OS.

Instead of being able to acquire the patents, Microsoft will receive a licence to use the patents, the DoJ said. Microsoft will also acquire licences to use the patents acquired by CPTN’s other owners. Also under the deal, EMC will not aquire 33 Novell patents and patent applications related to virtualisation software.

In addition, the deal will  mean that the patents will be subject to the GNU General Public Licence, Version 2, and the Open Invention Network (OIN) licence, according to the DoJ. CPTN will not be able to limit which of the patents are available under the OIN licence and will be prohibited from influencing Novell or Attachmate to limit which patents are available under that licence.

In November CPTN announced plans to buy 882 Novell patents, which would then be distributed amongst CPTN’s owners. The original deal would however have hampered the ability of open source software to compete in the middleware, virtualisation and server, desktop and mobile OS markets, according to the DoJ.

The department said that while the arrangement does not end its scrutiny of the Novell-Attachmate merger, it will allow the merger to proceed to the next stage.

“The parties’ actions address the immediate competitive concerns resulting from the transfer of Novell’s patents,” said Sharis Pozen, deputy assistant attorney general in the DoJ’s Antitrust Division, in a statement.

The Open Source Initiative said the deal underscores the importance of open source software.

“Open source is a crucial market force, ensuring strong competition and as such deserves regulatory recognition and protection,” said OSI director Simon Phipps, in a statement.

Florian Mueller, a software developer and open source blogger, said the deal is unlikely to have made much of a real difference to open source’s competitiveness.

“Considering that Microsoft files hundreds of new patents every month, it seems obvious that they don’t have to acquire a couple hundred Novell patents in order to beef up their own patent portfolio,” he said in a blog post.

While the DoJ is protecting Novell and Attachmate’s ability to choose the OIN licence for the patents changing hands, as a way of ensuring open competition, Mueller said that, to date, the OIN and its licence do not seem to have made much of a difference to the patent warfare surrounding open source software.

“In my opinion, the flood of patent lawsuits especially in the smartphone space shows that the OIN doesn’t deter anyone from asserting patents against Linux and Linux derivatives like Android,” Mueller wrote.