The terms of Novell’s sale have been changed

Last November news came about Novell being sold. The bulk of the company’s assets were acquired by Attachmate Corporation but many patents were sold to the consortium CPTN Holdings LLC, organized by Microsoft. That caused various concerns about possible effects on competition caused by monopolistic actions possible not only by Microsoft but also by other members of the consortium: Apple, Oracle and EMC.

Yesterday the decision that the U.S. Department of Justice took together with the German Bundeskartellamt (the Federal Cartel Office) was published. The two authorities have cooperated in the investigation and eventually determined that it was necessary to impose a change in the terms of the patents sale. They felt that the original agreement could jeopardize the possibility for open source software like Linux to continue its work in the competition for innovation and product development of server, desktop, mobile, middleware and virtualization products.

In order to safeguard competition the agreement was amended so CPTN and Novell agreed to comply with these terms:

  • Microsoft will sell back to Attachmate all of the Novell patents that Microsoft would have otherwise acquired, but will continue to receive a license for the use of those patents, the patents acquired by the other three participants and any patents retained by Novell
  • EMC will not acquire 33 Novell patents and patent applications that have been identified as related to virtualization software
  • All of the Novell patents will be acquired subject to the GNU General Public License, Version 2, a widely adopted open-source license, and the Open Invention Network (OIN) License, a significant license for the Linux System
  • CPTN does not have the right to limit which of the patents, if any, are available under the OIN license
  • Neither CPTN nor its owners will make any statement or take any action with the purpose of influencing or encouraging either Novell or Attachmate to modify which of the patents are available under the OIN license

This decision is very important not only because it changes the terms of a deal that could have been dangerous for competition in the software market but also and perhaps primarily because it recognizes the importance of open source software and the danger of FUD (Fear, Uncertainty, Doubt) strategies that big companies can use against smaller competitors.

It’s true that Microsoft will have a license on Novell patents but the need to regulate their ownership and management was recognized. The antitrust authorities of U.S.A. and Germany have found it necessary to act in advance to change an agreement that could lead to imbalances in the market rather than watch over and in case act later upon conducts that already caused damage.

Maybe having a toast with champagne is too much but we can welcome this result with satisfaction.

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