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Worst-Case Scenario or Sure Shot? - More on the Novell-MS Deal
Tuesday, May 29 2007 @ 05:01 PM EDT

I see a number of journalists have now read the patent peace agreement and the accompanying technical and marketing agreements that Novell filed on Friday with its 10K. And most are noticing that Novell has expressed in its risks section in that annual report that if the GPLv3 does what it currently says, then it could impact the Novell-Microsoft deal:
If the final version of GPLv3 contains terms or conditions that interfere with our agreement with Microsoft or our ability to distribute GPLv3 code, Microsoft may cease to distribute SUSE Linux coupons in order to avoid the extension of its patent covenants to a broader range of GPLv3 software recipients, we may need to modify our relationship with Microsoft under less advantageous terms than our current agreement, or we may be restricted in our ability to include GPLv3 code in our products, any of which could adversely affect our business and our operating results. In such a case, we would likely explore alternatives to remedy the conflict, but there is no assurance that we would be successful in these efforts.

Kevin Murphy in his CBR Online article, Novell outlines GPLv3 worst-case scenario, noticed that this seems discordant with what Novell told him in March:

A Novell spokesperson had told us in late March: "Nothing in this new draft of GPL3 inhibits Novell's ability to include GPL3 technologies in SUSE Linux Enterprise, openSUSE, and other Novell open source offerings, now and in the future."

Obviously, something doesn't match up. Why? I think it's simply because there is a new factor discovered since March -- namely that the vouchers have no expiration date.

As Murphy puts it in his article, GPLv3 "outlaws" the type of patent covenant Novell entered into with Microsoft, which I call the NotaDuck agreement. Here's one section in the GPLv3 that talks about such deals:

You may not convey a covered work if you are a party to an arrangement with a third party that is in the business of distributing software, under which you make payment to the third party based on the extent of your activity of conveying the work, and under which the third party grants, to any of the parties who would receive the covered work from you, a patent license (a) in connection with copies of the covered work conveyed by you, and/or copies made from those, or (b) primarily for and in connection with specific products or compilations that contain the covered work, which license does not cover, prohibits the exercise of, or is conditioned on the non-exercise of any of the rights that are specifically granted to recipients of the covered work under this License[, unless you entered into that arrangement, or that patent license was granted, prior to March 28, 2007].

Notice the word "unless" at the end? And the date? You might at first conclude that this clause means Novell "gets away with it" and in fact on first reading I thought that also. I think Novell may have understood it that way, too, judging by the March statement. The new filing makes me think that they understand now the danger better, as do I, since learning about the vouchers.

We only just learned this month that the vouchers it sold to Microsoft have no expiration date. And Eben Moglen has explained the significance of that fact. I reported it here on May 18. Todd Bishop broke the story that day on his Seattle PI blog, having listened to the OpenLogic webinar where Moglen spoke (you can listen too). It's the first I knew this, and it may be the first Novell knew it too. By that I mean, it may be the first Novell realized the importance of that fact, how it would all play out. I don't like this patent deal, but I don't believe for one second that Novell would mislead anyone about it deliberately. To understand why this new information is so important, let's read another paragraph in GPLv3:

If, pursuant to or in connection with a single transaction or arrangement, you convey, or propagate by procuring conveyance of, a covered work, and grant a patent license providing freedom to use, propagate, modify or convey a specific copy of the covered work to any of the parties receiving the covered work, then the patent license you grant is automatically extended to all recipients of the covered work and works based on it.

This is a description of what Microsoft is doing with the vouchers. Notice that it doesn't actually outlaw such behavior. You can enter into deals like this, but GPLv3 will make such deals unappealing. To Microsoft, the deal becomes toxic, if it wishes to use patents to damage Linux or whatever the plan is. So it doesn't really outlaw anything. Microsoft is free to do such a deal, still, if it wishes to give its 235 patents freely to the Linux and FOSS community. And of course, I wish it would. Why not solve the interoperability problem, as it views it, that way? That plus standards, and shazaam. The problem is solved.

David Berlind correctly noted that Microsoft isn't giving the vouchers away. It sells them, and it is free to make a profit and keep the change:

Novell acknowledges and agrees that Microsoft may exercise its sole discretion in determining how and whether to use and/or distribute the Prepaid Subscription Rights to best implement Microsoft’s internal business strategies for driving incremental revenue growth and otherwise furthering Microsoft’s business interests. Accordingly, Microsoft, in its sole discretion, will establish the price it will charge Shared Customers and other SLES licensees for such Prepaid Subscription Rights. Novell acknowledges that it is not entitled to share in any revenue (if any) generated by Microsoft from the distribution of the Prepaid Subscription Rights.

These aren't just coupons that they throw into the box, freebies they hope you'll decide to use one day to try out SUSE. People pay for the vouchers, up front, and they pay Microsoft, not Novell. Anyone out there still think that Microsoft isn't distributing, even under GPLv2? And of course, under GPLv3, it doesn't need to be, although it also still would be, by my understanding. GPLv3 describes behavior that Microsoft is involved in. So that is why it would be stuck like a dead butterfly to an exhibit wall under GPLv3.

So, with the deadline for GPLv3 just around the corner, Microsoft is facing a dilemma I doubt it anticipated when it entered the deal, and Moglen remarked on how Microsoft seems to be trying to get rid of the vouchers as fast as it can. The Dell deal comes to mind. So what will happen to Microsoft once GPLv3 is active? Here's a portion of what Moglen said about this at the webinar:

Microsoft's activity will begin to disperse patent defenses into the community. When GPL 3 goes into effect, every Microsoft coupon handed to somebody, which results in the shipment of a Novell Server Edition product to that coupon-holder, will result in a conveyance of broad patent defenses to parties throughout the community....

You have been watching for months as Microsoft gave away these coupons -- which were supposed to be valuable to Microsoft, and for which it paid a lot of money -- as though the coupons themselves were hot, as indeed they are. All of this giving away coupons activity by Microsoft is meaningless and useless. The coupons have no expiration date, and Microsoft can be sure that some coupons will be turned into Novell in return for software after the effective date of GPL 3. Once that has happened, patent defenses will, under the license, have moved out into the broad community and be available to anybody who Microsoft should ever sue for infringement.

So, the way this all adds up to my understanding is that it's certain to happen. It's not just a worst-case scenario. It's a train coming straight at Microsoft's patent threats, and I'm guessing Microsoft is trying to figure out how to untie itself from the track. No doubt Microsoft will in time address the matter and say something, but I can't help but think that the current "but we never meant to rattle our patent saber" talk may stem from an awareness that the game is over, or at least this part of the game. Moglen has already said he'll issue a statement after he's had time to review all the agreements and analyze them. So this is just li'l ole me talking about how I understand things so far.

I'm still analyzing the agreement myself, but from what I see, the promise being offered doesn't cover anywhere near what I thought it did. But that's for a later article.


Worst-Case Scenario or Sure Shot? - More on the Novell-MS Deal | 409 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections Here
Authored by: filker0 on Tuesday, May 29 2007 @ 05:18 PM EDT
Wow, I've never been in time to do this before...

The opinions expressed here are my own, and do not reflect those of my current
or previous employers. IaNaL.

[ Reply to This | # ]

M$ Puts Head in noose, re: Worst-Case Scenario or Sure Shot? - the Novell-MS Deal
Authored by: martimus on Tuesday, May 29 2007 @ 05:19 PM EDT

IANAL, but the delicious irony here is just too incredible to believe. M$ thought they were going to get a great FUD weapon, but what they really did was Trojan Horsed their own patent portfolio. Just incredible; the best news about M$ I've heard since they Zuned themselves last fall.

To paraphrase Benjamin Franklin: Billions for defense, but not one cent for dhimmitude.

[ Reply to This | # ]

Off Topic here
Authored by: filker0 on Tuesday, May 29 2007 @ 05:24 PM EDT
Include clickies. Remember to post using HTML Formatted, and encode your clickies as

<a href="clicky_url">clicky text</a>

The opinions expressed here are my own, and do not reflect those of my current or previous employers. IaNaL.

[ Reply to This | # ]

The Inquirer reporting that Microsoft Novell deal is responsible for Novell going into the red
Authored by: Anonymous on Tuesday, May 29 2007 @ 05:27 PM EDT
Novell goes into the Red

The curse of the penguin strikes

By Nick Farrell: Tuesday 29 May 2007, 16:24

THE THOUSANDS of pins stuck into the effigy of Novell by Open Sorcerers seems to have had a dire effect on the outfit's bottom line. The Open Sauce movement threw up its collective hands in disgust when Novell signed a pact with Microsoft promising not to sue each other over software patents. Now it seems that Novell's software license sales have dropped by nine per cent and the company has started to lose cash. Sales of maintenance contracts, software subscriptions are down by four per cent and total sales are down five per cent.

I'm hoping all the former SuSE execs who recently left Novell in disgust band together and fork SuSE and steal all their customers back.

If Richard Seibt (former CEO of SuSE who recently left Novell), Hubert Mantel (co-founder of SuSE and maintainer of the SuSE kernel who recently left Novell) and Chris Stone (former Novell Linux guy who bought SuSE who recently left Novell) all formed a new company to fork SuSE I suspect there aren't many Novell-Linux customers who wouldn't want to switch to this new organization.

[ Reply to This | # ]

Patent Peace renegotiated
Authored by: DannyB on Tuesday, May 29 2007 @ 05:28 PM EDT
Maybe Novell will be successful in renegotiating its deal with Microsoft?


Hovsapian comming back from Redmond announcing that he has signed a deal with
Microsoft for Patent Peace.

Finally... Patent Peace In Our Time!

The price of freedom is eternal litigation.

[ Reply to This | # ]

"or any later version" seems dangerous
Authored by: Anonymous on Tuesday, May 29 2007 @ 05:32 PM EDT
While in this case I am certain that it couldn't have happened to a more
deserving company (Microsoft), this saga does hilight the danger of doing
anything with a license that contains text like "or any later

Linus removed that text when he chose the GPLv2 for the Linux kernel, and the
result was that everyone who received that kernel and wanted to do something
with it knew exactly what permissions they were getting, *and* Linus and other
contributors who chose the same license for their contributions, knew exactly
what permissions they were giving! The same can not be said for an "or any
later version" license.

These anti-NotaDuck clauses in GPLv3 are intended to prevent
"workarounds" by companies that want to violate the spirit of the GPL,
in effect, they want to exploit a "bug" in the license, and fixing the
"bug" with a new version seems like an appropriate action for the FSF
to take. But I can't help noticing that unintended consequences like the ones
Novell and Microsoft are now experiencing, could just as easily attach to some
other change in some future version of the GPL.

I appreciate the efforts of Stallman and Moglen and others to protect my (and
everyone else's) freedom to use software as I see fit. I just worry that
choosing an open-ended license could cause problems.

If I were releasing a project of my own under the GPL, and I wanted to accept
fixes and contributions from other parties, then the ideal thing would be for me
to release it under "GPLv3 only" but requesting that anyone else
contributing code to be added to my project license it to me under "GPLv3
or any later version". That would make it possible for me to relicense a
future version to a newer version of the GPL, but without requiring me to do so.
But it would be hypocritical of me to ask others to give me the open-ended
"or any later version" license when I wouldn't want to use it

[ Reply to This | # ]

Novell M$ Deal
Authored by: filker0 on Tuesday, May 29 2007 @ 05:36 PM EDT
My reading of Novell's filing is that, if push comes to shove, they'll abandon the deal with M$ if that's what it takes to keep distributing GPLed software. They won't be happy about it, but they'll do it.

I'm guessing that it's their only choice, but they're unlikely to deliberatly harm FOSS.

I'm in the camp that believes that Novell believed it was doing a positive thing (though not without commercial advantage in mind, so it wasn't altruistic by any means) when they signed the deal with the folks in Redmond. I'm sorry that it's not worked out the way that they'd wanted it to.

The opinions expressed here are my own, and do not reflect those of my current or previous employers. IaNaL.

[ Reply to This | # ]

  • Novell M$ Deal - Authored by: Anonymous on Wednesday, May 30 2007 @ 05:28 AM EDT
    • Novell M$ Deal - Authored by: Anonymous on Wednesday, May 30 2007 @ 10:16 AM EDT
Worst-Case Scenario or Sure Shot? - More on the Novell-MS Deal
Authored by: ralevin on Tuesday, May 29 2007 @ 05:40 PM EDT
Be cautious about taking what you read in a corporate "risks" section
to seriously. I read enough annual reports in a year that it is clear that all
companies now put down any possible problem that may arise. All of it hedged
with "may" or "could" or "if". Look at the report
of whatever company you think is the strongest in any industry, and you'll find
a whole list of issues that sound like they are on the verge of disappearing.

That Novell put this issue in the 10-K does not mean they think it's likely,
only that it is remotely plausible, and they want a court defense. It only costs
them some ink and paper.

We will see how this plays out over time, but I will predict that the Novell-MS
agreement will be of much less importance than most people, on either side,
currently think.

[ Reply to This | # ]

It will not all come loose at once...
Authored by: mtew on Tuesday, May 29 2007 @ 06:02 PM EDT
While I understand (INaL) that any software released under GPL3 after GPL3
becomes effective is free from patent risks, that does not assure that all of
the patents in question will become free (in the liberty sense of free).

First, the software may not infringe a patent, and will thus not need to grant a
license for the uninfringed patent.

Second, in order to grant a license to a patent you must have the right to grant
such a license. While I do not think it is possible (again INaL), Microsoft
might make a claim that the people who contribute GPL3 software that infringes
one of their patents to SUSE could not legaly do so, and since SUSE did not have
the right to distribute the infringing software, any suit would be at Microsofts
discression and dependent on their good will [:*(]. There are probably some
real problems with such a position, but until the mess is cleared up, Microsoft
could make things difficult. Since one of Microsoft's apparent aims it to make
things difficult, they would be in no hurry to have the issue settled.

I really do NOT want to rain on the parade, but those clouds look way too


[ Reply to This | # ]

Dont' get your hopes up
Authored by: Anonymous on Tuesday, May 29 2007 @ 06:02 PM EDT
Don't get your hopes up.
Novell just needs to "freeze" their current product with only GPL2 in
it and spin off a "New" product line that has GLP3. Then the coupons
are only good for the current (frozen) product and thus no GLP3 problem. Also I
would suspect that under the way the law works, Novell would be the one adding
the GPL3 *after* the Microsoft agreement and Microsoft would be able to cry
"foul" and get out of it on the basis that the agreement was altered
by Novell without Microsoft consent -- depends on contract law (or if this was
SCO, maybe copyrights, no, contract, err.. trademark law????)

[ Reply to This | # ]

Worst-Case Scenario or Sure Shot? - More on the Novell-MS Deal
Authored by: Hydra on Tuesday, May 29 2007 @ 06:32 PM EDT

At the risc of mentioning something that has already been mentioned before (haven't time to read all the replies nowadays)...

Microsoft/Novell agreement may exclude patent protection for Wine, OpenOffice

Although most of the details surrounding the agreement have already been disclosed, there are a few aspects of the deal that weren't previously known. Of particular interest is the language that describes exceptions to the patent indemnification agreement. The deal specifically excludes patent protection for "clone products." In the agreement, a clone product is broadly defined as "a product (or major component thereof) of a Party that has the same or substantially the same features and functionality as a then-existing product (or major component thereof) of the other Party ... and that has the same or substantially the same user interface, or implements all or substantially all of the Application Programming Interfaces of the Prior Product."

How many alleged patents were breached in OpenOffice again?

[ Reply to This | # ]

Did Novell Get Rooked By M$ On This?
Authored by: TheBlueSkyRanger on Tuesday, May 29 2007 @ 06:41 PM EDT
Hey, everybody!

Considering everything from contracts to those scratch and win cards I get at
the burger stand have expiration dates, this seems really weird to me.

Either M$ sold Novell on the idea that the vouchers shouldn't have expiration
dates for some reason (presumably to cover the constantly changing versions of
the apps and kernel) or Novell felt that wasn't necessary. With all the hassle
Novell is going through with SCO, that seems unlikely.

So, M$ convincing Novell that they didn't need expiration dates is likely. Was
this a plan all along for M$ to stick it to Novell? They take advantage of
Novell's ambition. And Novell is in the trick bag, having to restructure the
deal M$ KNEW was coming (the FOSS community takes nothing lying down, and M$
knows it).

M$ is rotten, but if this theory is true, I have to salute them. This would be
a really slick con job, bordering on art.

And to all the naysayers who think too much is being read into this--if we were,
Novell wouldn't be having kittens right now.

Dobre utka,
The Blue Sky Ranger

[ Reply to This | # ]

Authored by: Anonymous on Tuesday, May 29 2007 @ 06:50 PM EDT
I'm no MS apologist. And I recognize that what MS was trying to do in the
Novell deal is blatantly unfair to the OSS community. But...

This whole business of the FSF changing the GPL to deliberately gut a deal, to
which they were not a party, makes me uncomfortable. If it doesn't make you
uncomfortable, I ask you: Would you feel uncomfortable if it was somebody other
than MS on the receiving end of this?

The only thing that makes me not think that the whole thing was completely out
of line is that the MS-Novell deal is itself in (at least seeming) violation of
the GPLv2, which makes the whole thing the FSF's business.



[ Reply to This | # ]

What I don't understand...
Authored by: Anonymous on Tuesday, May 29 2007 @ 06:52 PM EDT
It seems to me that Novell already distributes software under the "or
later" clause, so why does the no expiration date matter? They are
currently distributing under an open ended promise that the software they
currently distribute may (at the recipient's option) fall under whatever license
the FSF decides to write as a future version. If they didn't want to do that,
they could limit software they distribute to GPLv2 only.

Similarly, MS is selling vouchers to software that they know is distributed
under the "or later" clause. Recipients are free to accept GPLv3 as
soon as it is finalized by the FSF.

For a company that is fully committed to open source (e.g. RedHat), keeping the
"or later" clause makes sense. For anybody else, I don't understand
why they give control of such an important aspect of their business to the FSF.

Note that, for example, Sun only distributes software under a particular license
after that license has actually been written.

It seems to me (IANAL) that the no expiration date is irrelevant.

[ Reply to This | # ]

MS can get out, but it's gotta act fast
Authored by: Anonymous on Tuesday, May 29 2007 @ 07:01 PM EDT

All they have to do is exercise that clause that says they can revoke the patent covenant anytime they want for any reason including "because I felt like it - nyah".

I'm thinking though that they'll have to revoke the covenant before the "cat's outa the bag".


[ Reply to This | # ]

That leads to an excellent question! (lawyers pls reply)
Authored by: Anonymous on Tuesday, May 29 2007 @ 07:14 PM EDT
Hypothetical situation...

1. a user buys a coupon from microsoft recently (or soon)
2. the gpl v3 gets real close and m$ realizes they're screwed so
3. m$ scuttles the deal (as they are permitted to)
4. user waits for gpl v3 to be fully released and
5. can the user now use the coupon they purchased?

the coupon has no expiry date
the coupon is PURCHASED, so it has a value
there is a contractual requirement to provide goods based on the coupon

can M$ invalidate the coupons simply by scuttling the deal at any time?

[ Reply to This | # ]

Deliberate.. or coincidence?
Authored by: Anonymous on Tuesday, May 29 2007 @ 07:15 PM EDT
Lets say this all does come to pass and <insert end-result

I wonder if we'll ever find out if it was architected
(Novell? FSF?) or simply a coincidence?

[ Reply to This | # ]

Worst-Case Scenario or Sure Shot? - More on the Novell-MS Deal
Authored by: Anonymous on Tuesday, May 29 2007 @ 07:17 PM EDT
Look for a Microsoft deal to simply buy Novell. The new Novell will never
release anything that's covered by the GPLv3. Sure, they'll become obsolete and
irrelevant rather quickly, but it'll solve Microsoft's problem, and may be worth
the cost.

[ Reply to This | # ]

I don't think coupons are keeping them up nights
Authored by: Reven on Tuesday, May 29 2007 @ 07:18 PM EDT
As much as I would like to think that this coupon deal means that Microsoft is distributing Linux (and thus incurring all the legal ramifications thereof), this just doesn't mesh for me.

The heart of the matter is this - that in a purchase, the person who pays the cost of the transaction doesn't have to be a party to the transfer of rights or ownership. Imagine a father/daughter going to a car dealership on her sweet sixteen. He forks over the dough, but she gets her name on the pink slip. Daughter is making the purchase, but Daddy is paying the cost.

In this case, it's not even a cur and dry transfer. There is the further abstraction of coupons. Coupons were issued that are redeemable for a copy of Suse Linux. Microsoft can distribute a coupon without distributing Linux. They aren't Linux - they are a payment abstraction. Saying Microsoft is distributing Linux is like my selling someone a postage stamp and having someone claim that means I mailed him a letter. No, I didn't mail a letter, I sold a coupon that is redeemable for postage service. The Suse coupons, like a postage stamp, are simply mechanisms to abstract payment for a good or service.

Microsoft and Novell may have done some dumb things, each in their own special way, but this coupon thing is only keeping them up nights as much as it is a PR problem, not an actual legal problem.

Ex Turbo Modestum

[ Reply to This | # ]

not patented, but ...
Authored by: Anonymous on Tuesday, May 29 2007 @ 07:25 PM EDT
I wish that we'd focus far less on imitating Redmond. While looking around
kdelook over the weekend, I noticed a bunch of close buttons are now rectangle.
I also saw someone reimplement the new vista start menu (why, i don't know). We
have very smart developers and I can't understand why their time is wasted
imitating an incredibly trashy OS. Please, fellow developers, continue to
innovate instead of imitate. They follow us, not the other way around. :)

On a side note, my wife just got a new laptop over the weekend that had vista,
and she didn't even get through the initialization before she thought MS was
asking her to pay money. They weren't, but how's that for a good reputation? ;)
We tried Dell, but they wanted about $400 more for pretty much the same laptop.

[ Reply to This | # ]

Can someone clear this up for me?
Authored by: VivianC on Tuesday, May 29 2007 @ 07:29 PM EDT
I've been following all this talk about GPL3 and the Novell-MS deal and the
possible ramifications. My question is: don't these scenarios only apply if the
software is under GPL3? Last I heard, Linus wasn't planning on moving the kernel
to GPL3.

Basically, if Novell continues to only distribute software that is under GPL2,
Microsoft is safe. For each mystery patent, Microsoft via Novell would need to
distribute a GPL3 application that would protect people downstream. Am I
thinking correctly or am I off base?

[ Reply to This | # ]

The confusing bit
Authored by: Anonymous on Tuesday, May 29 2007 @ 07:47 PM EDT
Microsoft practically own the desktop market and are doing just fine on server
too. The Linux and Mac threats on the desktop are at joke levels at present,
mostly because both of these platforms cannot easily run the vast array of
Windows software. And this isn't about to change any time soon.

So, why does a company with tens of billions of dollars in the bank need to
resort to threats to open spurce community, when they are doing just fine?
Aren't they just bringing negative publicity upon themselves?

[ Reply to This | # ]

Am I missing something?
Authored by: macros on Tuesday, May 29 2007 @ 07:52 PM EDT
I understand that the GPLv3 will nail the MS-Novell deal to the wall.

But, will the GPLv3 automatically apply to all the code that is currently in the
Linux kernal? Won't the authors have to update their code to accept the GPLv3
rather than the GPLv2 (if they don't automatically accept any updated to the

I recall something mentioned that Linus said he doesn't care about the GPLv3 as
the kernal is covered by GPLv2.

So, will it affect the deal?


[ Reply to This | # ]

"Activation Period" in 4.3(c)
Authored by: Anonymous on Tuesday, May 29 2007 @ 08:04 PM EDT
The First Amended and Restated Business Collaboration Agreeement says, in section 4.3(c),
Novell further agrees that, for each Prepaid Subscription Right that Microsoft uses or distributes and that is activated within the applicable Activation Period, Novell will promptly enter into a corresponding SLES Subscription with the Shared Customer or other SLES licensee that is the recipient of such Prepaid Subscription Right, without any charge whatsoever to such recipient (except for reasonable media and shipping costs).

What is this Activation Period? Are the certificates useless after the Activation Period runs out? Does the end of the Activation Period act like an expiration date?

[ Reply to This | # ]

Will Novell distribute GPL3 code?
Authored by: stites on Tuesday, May 29 2007 @ 08:39 PM EDT
I think that all of the commentary on this page assumes that when code starts
being released under GPL3 that Novell will distribute it. When the draft GPL3
was changed to handle the Microsoft-Novell agreement I understood that the
proposed draft of GPL3 forbids Novell to distribute GPL3 code under the terms of
the Microsoft-Novell agreement.

So shouldn't the problems that Microsoft will face if Novell distributes GPL3
code be only half of the possible scenarios? What problems will Microsoft and
Novell face if Novell decides to abide by the terms of GPL3 and not distribute
GPL3 code?

Steve Stites

[ Reply to This | # ]

Follow the Money
Authored by: Anonymous on Tuesday, May 29 2007 @ 11:33 PM EDT

As usual, people reading the patent covenant miss the money aspect. To public companies, money is GOD. The sum to Novell well exceeds the sum to Microsoft. The covenant values Novell's IP way over any Microsoft IP.

The deal is a sham, engineered to make Microsoft pay for IP that they bought from SCO, but IP that SCO didn't own. The problem is, if Novell admitted this fact, one of their claims against SCO would be mote. You can't recover twice.

Why doesn't Microsoft come forward and explain this fact?

1) Their in bed with SCO. The FUD factor is just too valueable to give up.

2) The Justice department might want to review the SCO/IP deal (not this Justice department, the next one). Was there good faith there? Did Microsoft know it was buying nothing? Are these actions, which extended the SCO/IBM case life and tied up a court system legal?

3) Continuing FUD factor. Proof of that is in every trade paper for the last few weeks.

As to Novell? After the Novell/SCO trial is over, they will announce that, after a through review of Microsoft patents, they find no IP violations with their Linux product. Having cleared their product of any Microsoft patents, they will continue to sell Linux and Open Source Software. No harm, no foul.

How will Microsoft respond? They will continue to say they have hundreds of patents violated by OSS. But Novell is still covered. They don't have to prove anything until they sue somebody. A suit negates the FUD value. Ergo, no suits.

The only part of the puzzle I haven't figured out is Sun's SCO/IP license. What was going on there for something like $20 million (from memory). All I can see is Sun, playing both ends against the middle.

[ Reply to This | # ]

Microsoft may be vulnerable in some other related ways
Authored by: leopardi on Wednesday, May 30 2007 @ 12:09 AM EDT

  1. Microsoft already distributes GNU software under GPLv2 "or later", directly, without vouchers.
  2. Microsoft, like any large general proprietary software vendor, may need to obtain licenses for many software patents covering fundamental concepts and algorithms, whether or not they are bogus, such as patents covering the Fast Fourier Transform, matrix inversion and loop unrolling, modular arithmetic, the IF statement, and (of course!) all effective computation. Even with cross-licensing, I doubt that Microsoft always has all it bases covered on this issue. Doubtless they employ many clever people to try to roll back the software patent tide.

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GPL3 & Linux
Authored by: Gath on Wednesday, May 30 2007 @ 12:42 AM EDT
Here's what I'm confused about. Linux currently is licensed under the GPL2.
When the GPL3 is released will it automatically use that license? I thought
that all of the contributors of Linux has to give their permission first before
that could be done.

And has Linus even said he would use the new license? I know his reservations
for it has been lessoned but has he accepted it yet?

[ Reply to This | # ]

  • GPL3 & Linux - Authored by: Anonymous on Wednesday, May 30 2007 @ 02:26 AM EDT
  • GPL3 & Linux - Authored by: Artiken on Wednesday, May 30 2007 @ 05:04 AM EDT
    • very funny - Authored by: Anonymous on Wednesday, May 30 2007 @ 07:28 AM EDT
    • GPL3 & Linux - Authored by: Gath on Wednesday, May 30 2007 @ 11:41 AM EDT
    • OR is OR - Authored by: Anonymous on Thursday, May 31 2007 @ 11:13 AM EDT
Microsoft warrants not to sue for coupons already distributed
Authored by: devil's advocate on Wednesday, May 30 2007 @ 12:56 AM EDT

What does this mean:

Covenanting Party reserves the right to update (including discontinue) the foregoing covenant pursuant to the terms of the Patent Agreement between Novell and Microsoft that was publicly announced on November 2, 2006; however, the covenant as set forth above will continue as to specific copies of Covered Products distributed by the Covenanting Party for Revenue before such update.

The "Covenanting party" is Microsoft. The expression "distributed by the Covenanting Party for Revenue" I take to mean distribution of coupons by Microsoft, not distribution of copies of GNU/Linux by Novell. This implies that MS cannot cancel coupons already out there.

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Unintended consequences
Authored by: Anonymous on Wednesday, May 30 2007 @ 04:07 AM EDT
If Moglen's legal theory is correct, I'm actually rather worried by this feature
of our legal system. It's scary to me that any person or company (even MS) can
effectively sign *everything* away simply by selling another company's product.

For a reductio ad absurdum, consider what would happen if the following clause
were added to GPLv3:

"Any company that distributes this product agrees that, upon request from
the licensee, their CEO will stand on his head and squawk like a chicken."

My question is: If (hypothetically) this clause was introduced into GPL3, and if
(probably not hypothetically) Novell SUSE incorporated GPL3 code, would Steve
Ballmer be living in fear?

If so, I find that very weird and very scary.

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Why It Doesn't Matter
Authored by: sproggit on Wednesday, May 30 2007 @ 04:08 AM EDT
After all this, I'm not sure that any of this matters - even to GPLv2 code.

The reason is simple, and we should thank Microsoft.

When SCO - ok, Darl McBride - stood up and started making outrageous (and to
date unsubstantiated) claims about Linux infringing SCOs purchased Intellectual
Property, there were only a small number of people outside the FOSS and core
technology communities that paid the matter any real attention. This event did
hit mainstream media, but perhaps due in part to the absurdity of the claims,
the readily available evidence to the contrary, plus of course some sterling
work by IBMs Counsel, this bit of FUD was robbed of any long-lasting

Now things have changed. For a start the SCO case is unravelling before our very
eyes. But, much more importantly, Microsoft have entered the ring themselves,
directly, for the first time. Their claim that Linux infringed 235 patents
tipped them over the edge. It was interesting that they further broke this down
into claims against sub-systems (such as GUIs) without saying which GUIs they
accused of infringement.

However, I believe that's become immaterial for several reasons.

Firstly, in conjunction with this claim, we have the Supreme Court ruling
relating to obviousness. Microsoft are going to have to be careful as to which
of their patents they decide to wheel out as weapons against Linux. If they
choose badly and select claims that are later overturned, all they succeed in
doing is destroy their own credibility.

Secondly, we have the circumstantial evidence (coming at least in part from
Microsoft's own officers) that the company has been in discussions with major
clients and would prefer to license than litigate. That's a nice way of saying
that they would rather intimidate large corporates to take out some kind of
"patent indemnity" if those companies want to use the Linux platform.
Microsoft realise (thanks to the RIAA) that going after individual end users is
not an option. But this creates another problem for MS. Large corporates tend to
have their own legal departments, probably including a contracts specialist. To
be blunt, any company with a corporate legal department that signs a contract
with MS over "patent infringement" without checking to ensure the
validity of Microsoft's claims deserves to have their entire board of directors
sued by shareholders. I think Microsoft realise this and have changed tack

Thirdly, we have the recent disclosure that the coupons created by Microsoft and
Novell have no expiry date, along with all the ramifications that Eben Moglen
has explained.

When you take these loosely-related items and consider them together, it becomes
obvious that Microsoft have painted themselves into a corner.

The moment they disclose which specific patents they believe are infringed, the
community will either debunk the patent if they can, or code around it if they
can't debunk it. Microsoft know this.

Their public sabre-ratting, which was carefully timed to sit alongside their
private "We think you should get some indemnity for using Linux"
conversations that they may allegedly have been having, all created the opposite
effect to what they expected. It has caused the Corporate World to stop and pay
careful attention to what is going on. Remember, these are powerful business
we're talking about here, and large sums of money. Large corporations don't like
to give away hard-earned income when they don't have to, and in a competitive
market, it is worth the time and effort for a company to pay a staff or outside
lawyer to *thoroghly* check these MS claims before signing on any dotted lines.

As PJ always tells us, when it comes to the law, talk to your lawyer.

Of course, this isn't the end of the story, but it will be very interesting to
watch Microsoft over the next few months. I get the feeling that they will back
away from this line of attack and try others.

One thing is for sure - Microsoft won't go quietly. And in a weird way that's
good for the FOSS community and technology users in general, because if nothing
else it will make it easier for the world to see Microsoft's true colors. And
that can only be a good thing.

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"...the business of distributing software...."
Authored by: NickFortune on Wednesday, May 30 2007 @ 08:42 AM EDT
Just out of curiosity, what's to stop Bill gates from founding the Gates Patent
Trust, buying MS' patent portfolio from them for a token payment, and then
making the same deal with Novell?

I'm sure Eben Moglen has considered the point, but it seems a fairly obvious

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So there is no expiration, what about a version restriction?
Authored by: Anonymous on Wednesday, May 30 2007 @ 09:11 AM EDT
Everyone is making a big deal about the vouchers not having an expiration date.
Do the vouchers state a speciffic version of the SUSE Linux Enterprise Server
(SLES) software that the voucher can be redeemed for? The current version of
SLES is 10.x. If the vouchers are for SLES 10.x, then Novell would merely have
to release SLES 11.x under GPL v3 and the vouchers would only be good for the
GPL v2 software.

If the vouchers say "the latest version of SLES at the time of
redemption", then Novell can change the name of the next version to Novell
Linux Enterprise Server instead of SUSE Linux Enterprise Server, and the most
current version of SLES will still be 10.x.

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Novell could avoid this...
Authored by: seanlynch on Wednesday, May 30 2007 @ 10:06 AM EDT

Novell could avoid this by basing all future versions of their commercial products only on GPL v2 or earlier based software. Then they would have to implement any GPL v3 software with their own code and release it under GPL v2 or earlier.

that would, essentially, be a 'fork' of Linux. Novell would have to pay for the re-implementation of any GPL v3 code in Linux or in their distro. It would be small at first but would grow with time.

The point when the kernel goes GPL v3 would be the 'tipping point' where Novell would probably have to spend more than it is worth to maintain a GPL v2 or earlier distro.

I suppose that HURD will go GPL v3 before the Linux kernel does.

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How does Microsoft get bound to GPLv3?
Authored by: Anonymous on Wednesday, May 30 2007 @ 10:28 AM EDT
Probably a stupid question, but I'm honestly trying to understand how Microsoft
could become bound by this provision of GPLv3.

How can a software license create an obligation for someone who doesn't
distribute software under the license?

Is it really the fact that they distribute a voucher with a patent promise? So
giving away the voucher is "distribution" of the software, basically?


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Likely Impact
Authored by: rsteinmetz70112 on Wednesday, May 30 2007 @ 10:52 AM EDT
The Likely Impact of the GPLv3 seems to be different on each of the parties.

Microsoft can simply stop giving out Prepaid Subscription Vouchers and should
anyone attempt to try to extend the patent guarantee fight them. It seems to me
at least a murky enough area that Microsoft could make a fight of it and string
it out for a long time, possibly until the agreement expires. It seems unlikely
that anyone will actually ever sue Microsoft and the issue would only be used as
a defense if Microsoft eventually does sue someone, something also not likely to
happen, in my opinion.

Novell could simply continue on and hope it goes away, I think they probably
will. If Microsoft does eventually sue someone Novell is sure to be drawn into
it. Microsoft might decide to sue Novell for violating their agreement but its
hard to see how Microsoft could frame such a suit, unless Novell reneges on its
financial end of the agreement. Novell might get sued by some developer for
distributing their software in violation of the GPLv3. That would test this
whole thing but it's hard to see how anyone wins or who has the money and the
passion to do it. In any event since each package is covered by a separate
license from the author who actually has standing is somewhat problematic.

Unfortunately is seems FSF may be forced into action, since they have publicly
said Novell will be in violation of the GPLv3 and unless Novell can come up with
a way out it's right now hard to see what the end result might be.

One possible resolution which occurs to me is for Novell to repudiate the Patent
Agreement with Microsoft but continue to make whatever payments the agreement
calls for (it doesn't seem like that much money compared to the cost of a patent
law suit). I have no idea what the legal effect of that would be but the whole
thing is so convoluted that it might fly.

For any of this to get tested someone has to sue someone else but unless anyone
can point to a Microsoft patent in Linux or some other package with specificity,
a court might not take the case, as there would be no actual controversy. Novell
says there aren't any Microsoft patents in Linux.

The only sure case is to sue Microsoft for declaratory judgment although that is
a very dangerous thing to do since a court might just validate one of their

I'm just speculating on what might happen next.

Rsteinmetz - IANAL therefore my opinions are illegal.

"I could be wrong now, but I don't think so."
Randy Newman - The Title Theme from Monk

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When does "causing" happen?
Authored by: raindog on Wednesday, May 30 2007 @ 12:07 PM EDT
GPL3 draft 3 says, "To propagate a work means to do (or cause others to do)
anything with it that requires permission under applicable copyright law,

All these discussions about the vouchers seem to center on Microsoft
"causing" a distribution of software under GPL3 sometime in the future
by distributing vouchers now. Won't their lawyers argue that the
"causing" that they did took place when they gave the voucher away,
before the GPL3 was in effect on anything, and not in perpetuity whenever the
end user downloads an update?

[ Reply to This | # ]

Proof by repeated assertion.
Authored by: Anonymous on Wednesday, May 30 2007 @ 12:50 PM EDT

the act of selling a voucher is only (leagally) possible by abiding to the license terms that the software is bound to.
Proof by repeated assertion is not a valid form of argument. If you had proof of this, you would be showing me the caselaw, not repeating dubious statements that have already been challenged.

The reason people keep repeating themselves without showing the proof, is because they want this to be true, as opposed to knowing that it is true. They are deceiving themselves.

The community would be better served by skeptical analysis and investigation of fact, not unreasoning self-congratulation.

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Shrink-wrap revenge?
Authored by: Anonymous on Wednesday, May 30 2007 @ 01:36 PM EDT
Ianal, but isn't it true that many/most shrink-wrap software licences contain
language allowing the issuing party to change the terms at any time in the
future? If so, then how would this differ from what the GPL v3 proposes to do?

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Microsoft will attack the weak point, not the strong point of free software arguements!
Authored by: Anonymous on Thursday, May 31 2007 @ 06:36 PM EDT

Suppose that Darth wants to do something bad with some Free software. The GPL prevents Darth from doing this, when it works, by a two step process.

  1. Darth realizes that he is doing something that requires a license under applicable copyright law. The GPL is the only license available.
  2. The provisions of the GPL do not allow what Darth wants to do, so that Darth can not use GPL as a license if he does it.
Suppose that Darth goes ahead and does it anyway, what does the enforcement process look like? Darth gets sued under copyright law, like IBM did against SCO with IBM's counter claims.

The free software side has to prove two things:

  1. Darth has done something that requires a license under applicable copyright law.
  2. The GPL does not protect Darth because Darth has not abided by its terms.

In order the suit to be successfull against Darth, both steps have to succeed.

Step (2) can be optimized by the FSF, by adjusting the terms of the GPL, to make it as difficult as possible for Darth. The GPLv3 is an improvement in this process.

Step (1) is the step that the FSF can not control, because the applicable copyright law is written by the legislature (in the U.S. that would be congress), not by the FSF! Therefore, step (1) is the weak point!

If Microsoft is ever sued under the copyright law because of the coupons, Microsoft will attack the week point of the argument (1). This is what Microsoft's lawyers will say:

Microsoft has not and will not agree with any version of the GPL. Distributing these coupons does not require a license under applicable copyright law. Distributing coupons is not distributing software in the meaning of copyright law. Therefore the terms of the GPL (both versions) are irrelevant. The expiration date of the coupons is irrelevant. Game over.
The key assertion in the above is:
Distributing coupons is not distributing software in the meaning of copyright law.
If Microsoft can win on the key assertion. Then it will win. If the lawyers for the free software side can knock out the key assertion then they will win.

Why do the coupons exist in the first place? Why did not Microsoft just hand out SuSE installation DVDs? The reason is obvious. Microsoft did not want to become a GNU/Linux distributor. The coupons are a dodge to get around this. The whole raison d'etre for the coupons was that that Microsoft avoid becoming a GNU/Linux distributor! Can anyone believe that Microsoft allowed the coupon scheme to proceed, without first getting on LexisNexis and finding out whether the scheme would work? It is guaranteed that in some Microsoft lawyer's briefcase, there is a brief. And that brief deleniates in excruciating detail why the coupon scheme does not make Microsoft a GNU/Linux distributor. And the brief was checked and rechecked by multiple lawyers before the coupon scheme was ever allowed to proceed.

The free software argument against the MS-Novel coupon scheme, is a chain. And like any chain, it is only as strong as its weakest link. It is no good for free software advocates to sit back and congratulate themselves on how strong their strong point (2) is. Of course it is strong! The FSF deliberately designed the GPLv3 to make it strong! The point is, that Microsoft is not going to attack this strong point. Microsoft is going to attack the weak point (1).

Instead of congratulating them selves, free software advocates should be critically examining their own arguments looking for weak points. And when they find one, they should research the caselaw looking for ways to shore up their arguments! They should not be replying to the weak points with mere repeated assertion of what they hope should be true, instead they should do some real scholarship.

Groklaw should be a place for real scholarship, not self congratulation!

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Let's not forget the GPL v2 anti-patent provisions
Authored by: Anonymous on Saturday, June 02 2007 @ 01:02 PM EDT
Let us not forget the anti-patent provisions of GPLv2! It includes an "implied patent license". This is because it includes the following:
Each time you redistribute the Program (or any work based on the Program), the recipient automatically receives a license from the original licensor to copy, distribute or modify the Program subject to these terms and conditions. You may not impose any further restrictions on the recipients' exercise of the rights granted herein.
Finally, any free program is threatened constantly by software patents. We wish to avoid the danger that redistributors of a free program will individually obtain patent licenses, in effect making the program proprietary. To prevent this, we have made it clear that any patent must be licensed for everyone's free use or not licensed at all.
The second statement is from GPLv2's preamble, but it helps us understand how the first statement must be understood. The implied patent license says that when you distribute a GPlv2 program you grant a patent license for every patent that you have that has been implemented by the program.

The GPLv2's implied patent license has been researched by Adam Plug and Laura A. Marerus in a scholarly paper P otential Defenses of Implied Patent License Under the GPL. The GPLv3 rationale document also refers to the implied patent license.

Therefore if Microsoft has distributed SuSE Linux, then it has granted an implied patent license to every GPLv2 program included in the distribution, including the kernel! There is no need to wait for GPLv3 to kick in!

Therefore the big question is "has Microsoft distributed Linux?", that is, "is distributing coupons the same as distributing software in the meaning of copyright law?".

If the answer is "yes" then there is no need to wait for version 3. The expiration date of the coupons is irrelevant, and Novell should be praised rather that condemned for tricking Microsoft into becoming a GNU/Linux distributor. Microsoft will be forced to grant a patent license for every GPL prongram in SuSE's distribution!

If the answer is "no", then Microsoft has done nothing that requires a license under applicable copyright law. Microsoft will not agree to either version of the GPL. The terms of the GPL (both versions) will be irrelevant to Microsoft. The expiration date of the coupons will be again irrelevant, and Microsoft will continue its patent FUD as usual. Free software triumphalism on Groklaw, with respect to coupon expiration dates, will turn out to be misguided.

Note that in both cases the expiration date of the coupons turns out to be irrelevant!

Microsoft knew about the GPL implied patent license when it finalized the coupon scheme. The copyright date on the Plug and Marerus paper is 2006. This is why I suspect the anwer is "no".

So which is it, O ye people of Groklaw! I have been attempting to goad someone here to do some real research into this big question, rather than wishful thinking and hopefull surmising!

[ Reply to This | # ]

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