decoration decoration
Stories

GROKLAW
When you want to know more...
decoration
For layout only
Home
Archives
Site Map
Search
About Groklaw
Awards
Legal Research
Timelines
ApplevSamsung
ApplevSamsung p.2
ArchiveExplorer
Autozone
Bilski
Cases
Cast: Lawyers
Comes v. MS
Contracts/Documents
Courts
DRM
Gordon v MS
GPL
Grokdoc
HTML How To
IPI v RH
IV v. Google
Legal Docs
Lodsys
MS Litigations
MSvB&N
News Picks
Novell v. MS
Novell-MS Deal
ODF/OOXML
OOXML Appeals
OraclevGoogle
Patents
ProjectMonterey
Psystar
Quote Database
Red Hat v SCO
Salus Book
SCEA v Hotz
SCO Appeals
SCO Bankruptcy
SCO Financials
SCO Overview
SCO v IBM
SCO v Novell
SCO:Soup2Nuts
SCOsource
Sean Daly
Software Patents
Switch to Linux
Transcripts
Unix Books
Your contributions keep Groklaw going.
To donate to Groklaw 2.0:

Groklaw Gear

Click here to send an email to the editor of this weblog.


To read comments to this article, go here
Novell Sells Out
Thursday, November 02 2006 @ 05:55 PM EST

You can read the press release for yourself. Novell is paying Microsoft for its patents, and will pay royalties ongoing. Microsoft in turn promises not to sue individual non-commercial coders or paid coders who contribute to SUSE:
Under the patent agreement, both companies will make up-front payments in exchange for a release from any potential liability for use of each others patented intellectual property, with a net balancing payment from Microsoft to Novell reflecting the larger applicable volume of Microsoft’s product shipments. Novell will also make running royalty payments based on a percentage of its revenues from open source products.

The two companies will work on compatibility, mentioning specifically Novell developing code to support Microsoft's Office Open XML in OpenOffice. Microsoft will push SUSE. HP once again is there in the background, saying this is great. IBM says it is great. Intel. All the corporate dudes who showed up for Oracle's announcement. Obviously there is a corporate dance the community isn't invited to. What? They couldn't get Rob Enderle?

Here's the joint Microsoft-Novell "Letter to the FOSS Community" if you wish to observe the spin about how great this is "for the Linux market". Those of you who think the most important goal is market share will be happy. Those of you who think freedom matters will want to throw up.

Excuse me while I go throw up. I gather Microsoft no longer thinks Linux is a cancer or communism. Now it just wants a patent royalty from it. Wasn't that kinda SCO's dream at first? A kind of royalty on every box sold, every server shipped? Blech. And this "patent promise" is only for SUSE, so that tells the discerning observer that Microsoft will likely be suing others. As for Novell, if history means anything, it will end up Microsoft roadkill. It's so funny to me that nobody ever remembers what comes *after* the Embrace.

Update: The information on Open Office XML from that letter tells us this:

# Office Open XML

* Novell engineers have been working for the last year together with Microsoft engineers through the ECMA TC45 working group in producing a complete specification that would allow for interoperability across office suites.

* Novell will develop the code necessary to bring support for Office Open XML into OpenOffice, and we will contribute that support back to the OpenOffice.org organization. We will also distribute the Office Open XML plug-in in our own edition of OpenOffice. In addition, we will participate in the Open XML Translator open source project.

So that's what has been happening in ECMA TC45. And now we know the rest of the story.

The patent coverage is for Mono, OpenOffice and Samba also:

* Mono, OpenOffice and Samba

o Under the patent agreement, customers will receive coverage for Mono, Samba, and OpenOffice as well as .NET and Windows Server.

o All of these technologies will be improved upon during the 5 years of the agreement and there are some limits on the coverage that would be provided for future technologies added to these offerings.

o The collaboration framework we have put in place allows us to work on complex subjects such as this where intellectual property and innovation are important parts of the conversation.

o Novell customers can use these technologies, secure in the knowledge that Microsoft and Novell are working together to offer the best possible joint solution.

Secure is the very last word I would choose to describe my emotion.

More gruesome coverage in the media:

  • Tom Sanders on VNUnet, Microsoft Gives Novell Linux its Blessing":
    "Microsoft will make a onetime upfront payment to Novell for the cross licensing deal. Moving forward, Novell will pay a fee for each support Suse support contract that it sells.

    Ballmer claimed that Microsoft was unable to provide a broader patent pledge that would cover all Linux distributions because the company is unable to live with the conditions of the general public license (GPL). He also indicated that the company chose to partner with Novell because of the company's large patent portfolio.

    The agreement gives Novell a big advantage over Red Hat, which indemnify its customers against patent claims.

  • PC Magazine's Natali T. Del Conte, "Microsoft to Support Open-Source Linux with Novell":
    "We've made two promises under this agreement," said Brad Smith, senior vice president, general counsel, corporate secretary, legal and corporate affairs for Microsoft. "One is a promise that we won't assert our patents against individual open-source developers. These are individuals that are contributing code, not creating it as part of their job, but acting in an individual non-commercial way. The second is for developers who are getting paid to create code that Novell then takes and inputs into its distribution that is then covered within the open-source agreement between us."

  • Joris Evers and Stephen Shankland, on CNET, "Microsoft makes Linux pact with Novell":
    The companies will create a joint research facility at which they will build and test new products, and work with customers and the open-source community. The focus will be on three technical areas: virtualization, Web services for server management, and Microsoft Office-OpenOffice.org compatibility, the company executives said....

    Money is flowing both ways for the patent agreement, Smith said, including an "up-front balancing payment that runs from Microsoft to Novell, reflecting the large relevant volume of the products that we have shipped and an economic commitment from Novell to Microsoft that involves a running royalty."

  • Stephen J. Vaughan-Nichols on Desktop Linux, "Hell freezes over: Microsoft, Novell partner on Linux":
    It should be noted that while the potential for open-source patent lawsuits has long been recognized, none of any significance has ever been filed.

    As part of the agreement, Novell will pay a running royalty to Microsoft for use of its patents in SUSE Linux. ...Hovsepian revealed that he was the one who had opened the negotiations with Microsoft. He made the first moves in April 2006, not long after he became Novell's CEO.

  • Gavin Clarke in The Register, "Microsoft loves SUSE Linux (true!)":
    Ron Hovsepian, Novell's CEO, apparently called on Microsoft in April by first contacting Microsoft COO Kevin Turner. The price of his Faustian pact? Novell pays an undisclosed royalty to Microsoft amount based on a percentage of revenues until at least 2012 - the deal's expected lifespan. Financial details were not revealed although Hovsepian said Microsoft is putting an "impressive" amount of its own money into the deal. Ballmer sees "upside" for both businesses.

    He sidestepped the question of whether Microsoft would consider a similar deal with Red Hat. He said Microsoft had been in discussion with "a number of players in the industry", but "Ron called and had some ideas about what he wanted to [do] with mixed [open and "proprietary"] source." Hovsepian's thinking "dovetails with what we're thinking about," Ballmer said.

I hate to break it to Ballmer, but SUSE Linux is GPL code, which the two parties may find puts a little pebble in the shoe of this alliance. And on that joint research facility where the companies will "work with customers and the Open Source community," they may get customers, but how will you get anyone from the community to show up? And can Novell please provide us with specificity? Exactly what patents of Microsoft's are being paid for? And precisely where inside SUSE might one find them infringed? As for how wonderful it will be to mix proprietary code with FOSS, anybody see a trend here? Who'd a-thunk it was Microsoft having that dream all along?

The best headline of the day? Dana Gardner's on ZDNET: "Microsoft and Novell: Fox marries chicken, both move into henhouse." I hope all the folks who thought GPLv3 didn't need a patent clause are taking notes.

Update 2: 9:05 PM Eastern - Bruce Perens has an interesting take:

One of the questions yet to be settled is whether Novell will violate the GPL, the license of the Linux kernel and other important software, by offering patent protection that is exclusive to Novell customers. The press release pretty much stated that. On that topic, the preamble of the GPL says it best:
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.

Novell has clearly accepted that license. But it appears that they are now out to make patent protection a business differentiator.

Even if everyone were to be protected regarding software that Novell distributes, there's the tremendous collection of Free Software that they don't distribute. A logical next move for Microsoft could be to crack down on "unlicensed Linux", and "unlicensed Free Software", now that it can tell the courts that there is a Microsoft-licensed path. Or they can just passively let that threat stay there as a deterrent to anyone who would use Open Source without going through the Microsoft-approved Novell path. With this agreement, Microsoft also secures Novell's assistance in pushing a pro-Software-patenting agenda in Europe and elsewhere. On a panel that I led at the AlwaysOn conference this summer, Novell's president made clear their support for software patenting - a policy that works to the detriment of any Open Source developer who wants to have users without Novell's blessing. You can be sure they'll be at Microsoft's elbow now in meeting with legislators and asking for increases in patent protection.

Update 3: 9:09 PM Eastern - Eben Moglen confirms that this patent alliance raises GPL issues:

"If you make an agreement which requires you to pay a royalty to anybody for the right to distribute GPL software, you may not distribute it under the GPL," Moglen told CNET News.com Thursday. Section 7 of the GPL "requires that you have, and pass along to everybody, the right to distribute software freely and without additional permission."...

Whether the partnership precludes Novell from distributing Linux depends on precise terms of the agreement that Moglen hasn't seen, he cautioned.

Funny how the corporate guys' lawyers never do grok the GPL until they are in doodoo up to their armpits, like SCO.

*************************

Microsoft and Novell Announce Broad Collaboration on Windows and Linux Interoperability and Support

Companies also announce a patent agreement covering proprietary and open source products

REDMOND, Wash., and WALTHAM, Mass. – Nov. 2, 2006 – Microsoft and Novell today announced a set of broad business and technical collaboration agreements to build, market and support a series of new solutions to make Novell and Microsoft products work better together. The two companies also announced an agreement to provide each others’ customers with patent coverage for their respective products.

These agreements will be in place until at least 2012. Under this new model, customers will realize unprecedented choice and flexibility through improved interoperability and manageability between Windows and Linux.

“They said it couldn’t be done. This is a new model and a true evolution of our relationship that we think customers will immediately find compelling because it delivers practical value by bringing two of their most important platform investments closer together,” said Steve Ballmer, president and CEO of Microsoft. “We’re excited to work with Novell, whose strengths include its heritage as a mixed source company. Resolving our patent issues enables a combined focus on virtualization and Web Services Management to create new opportunities for our companies and our customers.”

Under the agreement, Novell is establishing clear leadership among Linux platform and open source software providers on interoperability for mixed source environments. As a result, Microsoft will officially recommend SUSE Linux Enterprise for customers who want Windows-Linux solutions. Additionally, Microsoft will distribute coupons for SUSE Linux Enterprise Server maintenance and support, so that customers can benefit from the use of an interoperable version of Linux with patent coverage, as well as the collaborative work between the two companies. “Too often technology companies ask their customers to adapt to them.

Today we are adapting to our customers,” said Ron Hovsepian, president and CEO of Novell. “Microsoft and Novell are enabling customers to take advantage of each others’ products where it makes sense in their enterprise infrastructure. We jointly believe that our business and patent agreements make it possible to offer the highest level of interoperability with the assurance that both our companies stand behind these solutions.”

Agreement has broad scope

The two companies will create a joint research facility at which Microsoft and Novell technical experts will architect and test new software solutions and work with customers and the community to build and support these technologies. The agreement between Microsoft and Novell focuses on three technical areas that provide important value and choice to the market:

* Virtualization. Virtualization is one of the most important trends in the industry. Customers tell us that virtualization is one way they can consolidate and more easily manage rapidly growing server workloads and their large set of server applications. Microsoft and Novell will jointly develop the most compelling virtualization offering in the market for Linux and Windows.

* Web Services for managing physical and virtual servers. Web Services and service oriented architectures continue to be one of the defining ways software companies can deliver greater value to customers. Microsoft and Novell will undertake work to make it easier for customers to manage mixed Windows and SUSE Linux Enterprise environments and to make it easier for customers to federate Microsoft Active Directory with Novell eDirectory.

* Document Format Compatibility. Microsoft and Novell have been focusing on ways to improve interoperability between office productivity applications. The two companies will now work together on ways for OpenOffice and Microsoft Office users to best share documents and both will take steps to make translators available to improve interoperability between Open XML and OpenDocument Formats.

“As a result of this collaboration, customers will now be able to run virtualized Linux on Windows or virtualized Windows on Linux,” said Jeff Jaffe, executive vice president and chief technology officer at Novell. “Customers continually ask us how they can consolidate servers with multiple operating systems through virtualization. By working together, Novell and Microsoft enable customers to choose the operating system that best fits their application and business needs.”

The patent agreement enables Microsoft and Novell to address the patent issues between them, which will give customers assurance of protection against patent infringement claims. It gives customers confidence the technologies they use and deploy in their environments are compliant with the two companies’ patents.

As part of this agreement, Microsoft will provide a covenant not to assert its patent rights against customers who have purchased SUSE Linux Enterprise Server or other covered products from Novell, and Novell will provide an identical covenant to customers who have a licensed version of Windows or other covered products from Microsoft.

“Both companies had to think creatively about how to create an intellectual property bridge between the two worlds of open source and proprietary software,” said Brad Smith, senior vice president and general counsel of Microsoft. “This bridge is built on respect for the innovations of each company, the open source community, and a passion for what we can deliver for our customers together.”

Customer and partner reaction

Microsoft and Novell announced the new alliance at an event attended by several customers and partners.

"We applaud Novell and Microsoft in their efforts to provide greater Windows and Linux interoperability,” said Paul Otellini, president and chief executive officer of Intel Corporation. “Customers want solutions that meet their individual needs and higher levels of software interoperability gives them the ability to more easily make the best choices."

“This technology and business collaboration provides a model that allows Microsoft and Novell to develop new solutions to enable open source and proprietary software to work better together in a mixed source environment. We applaud these two companies for doing the hard work to build a bridge between Windows and Linux,” said Shane Robison, EVP, Chief Strategy & Technology Officer, Hewlett-Packard Company.

"IBM is encouraged to see more industry endorsement of mixed source solutions that promote open standards and offer assurances to customers and open communities," said Steve Mills, Senior Vice President and Group Executive, IBM Software. "We are particularly glad to see Microsoft supporting interoperability with the industry standard Open Document Format. Open Documents give customers choice and help unlock broad industry creativity, allowing access to a new generation of innovative applications. Our view continues to be that interoperability and choice are key values that customers demand and deserve."

“SAP has been the first enterprise application vendor to run our apps on Linux, while we have more Windows based deployments than any other platform,” said Shai Agassi, President Product and Technology at SAP. “Today's announcement means that customers can now choose their preferred operating system for each part of their SAP implementation with the confidence that the systems will have strong interoperability and be supported by SAP, Novell and Microsoft - both companies being strong SAP partners”

"One of the key challenges in government is IT interoperability. We commend Microsoft and Novell for their collaboration and their efforts to build bridges in the interoperability area, which will help government to better serve our customers, our business community and our citizens," said Thomas Jarrett, Secretary of the Department of Technology/CIO, State of Delaware.

Good for the open source community

Novell officials noted that one of their priorities in working toward the agreement with Microsoft was making sure that the agreement made sense for the open source community. As part of today's agreement, Novell and Microsoft are announcing three important commitments. First, Microsoft will work with Novell and actively contribute to several open source software projects, including projects focused on office file formats and web services management. Second, Microsoft will not assert its patents against individual non-commercial open source developers and users. And third, Microsoft is promising not to assert its patents against individual contributors to openSUSE.org whose code is included in the SUSE Linux Enterprise platform, including SUSE Linux Enterprise Server and SUSE Linux Enterprise Desktop.

"Today's announcement by Microsoft and Novell marks a significant milestone in the adoption of Linux," said Stuart Cohen, CEO, Open Source Development Labs. "By choosing a course of co-opetition, Microsoft acknowledges the critical role that open source plays today in enterprise IT infrastructure. We appreciate the role Novell is playing to help bridge the gap between Microsoft and the open source community. We are glad to see these two companies collaborating to further diminish the legal threat posed to developers and customers by patent assertions. This is good for customer confidence in Linux, good for the open source community, and the broader IT ecosystem."

Additional announcement details

Like many commercial transactions, the financial terms of the agreement are not being disclosed at this time.

Under the technical collaboration agreement, the companies will create a joint research facility and pursue new software solutions for virtualization, management, and document format compatibility. These are potentially huge markets – IDC projects the overall market for virtual machine software to be $1.8 billion by 2010, and the overall market for distributed system management software to be $10.2 billion by 2010 – and the companies believe their investment in interoperability will make their respective products more attractive to customers.

Under the business collaboration agreement, the companies will pursue a variety of joint marketing activities. In addition, Microsoft will annually purchase as part of a resale arrangement approximately 70,000 coupons, with a mix of priority and standard support, for SUSE Linux Enterprise Server maintenance subscriptions. This program enables customers to benefit from the use of the new software solutions developed through the collaborative research effort, as well as a version of Linux that is covered with respect to Microsoft’s IP rights.

Under the patent agreement, both companies will make up-front payments in exchange for a release from any potential liability for use of each others patented intellectual property, with a net balancing payment from Microsoft to Novell reflecting the larger applicable volume of Microsoft’s product shipments. Novell will also make running royalty payments based on a percentage of its revenues from open source products.

The parties are assessing the accounting treatment for the agreements and will provide information as required in the course of their filings with the SEC.


  View Printable Version


Groklaw © Copyright 2003-2013 Pamela Jones.
All trademarks and copyrights on this page are owned by their respective owners.
Comments are owned by the individual posters.

PJ's articles are licensed under a Creative Commons License. ( Details )