| Novell defends Microsoft patent agreement |
Nov. 07, 2006
Novell says its recent patent agreement with Microsoft neither violates the GPL nor implies that Linux infringes on any of Microsoft's patents. Additionally, "Novell entered this broad set of agreements with Microsoft to further promote the adoption of Linux," according to Novell's senior VP and general counsel, Joseph A. LaSala, Jr.
In particular, LaSala continued, "Many people want to know whether this agreement is compatible with Novell's obligations under the GPL, especially section 7. This was an important consideration for us as well."
"Under the patent cooperation agreement, Novell's customers receive directly from Microsoft a covenant not to sue. Novell does not receive a patent license or covenant not to sue from Microsoft, and we have not agreed with Microsoft to any condition that would contradict the conditions of the GPL. Our agreement does not affect the freedom that Novell or anyone else in the open source community, including developers, has under the GPL and does not impose any condition that would contradict the conditions of the GPL. Therefore, the agreement is fully compliant with the GPL," concluded LaSala.
In a Novell and Microsoft FAQ, Novell goes into a bit more detail.
"Our agreement with Microsoft is focused on our customers, and does not include a patent license or covenant not to sue from Microsoft to Novell (or, for that matter, from Novell to Microsoft). Novell's customers receive a covenant not to sue directly from Microsoft. We have not agreed with Microsoft to any condition that would contradict the conditions of the GPL and we are in full compliance," the FAQ states.
Therefore, the FAQ continues, "Novell's end user customers receive a covenant not to sue directly from Microsoft for their use of Novell products and services, but these activities are outside the scope of the GPL."
Further, "Novell has no license or covenant not to sue from Microsoft under this agreement. The payments are for Microsoft's covenant directly to Novell's customers. By the same token, Microsoft's customers receive the same covenant from Novell in return for payment from Microsoft to Novell."
As far as Linux violating any patents, in the FAQ, Novell flat-out states, "Patent concerns did not drive our entry into this agreement. Novell makes no admission that its Linux and open source offerings infringe on any other parties' patents. Our position has not changed as a result of this agreement."
Further, the Linux company declares in the FAQ that "It has always been our policy in all development, open source and proprietary, to stay away from code that infringes another's patents, and we will continue to develop software using these standard practices. If any of our code is found to infringe someone else's patents, we will try to find prior technology to invalidate the patents, rework the code to design around the infringement, or as a last resort remove the functionality."
In other words, despite what others might think, Novell is committed to protecting, preserving, and promoting freedom for free and open source software.
Under the patent cooperation agreement, Microsoft will make an up-front net payment to Novell of $108 million, and Novell will make ongoing payments of at least $40 million over five years to Microsoft, based on percentages of Novell's Open Platform Solutions and Open Enterprise Server revenues.
David Kaefer, Microsoft's general manager of intellectual property and licensing explained that these numbers are "an up front payment that nets out to about $108 million. Then you see ongoing payments that Novell is making [that are] estimated at a minimum $40 million."
This amount "could go higher. The structure of the patent agreement is such that for the patent rights Microsoft receives we basically paid all at once up front," Kaefer added. "Novell has elected to pay incrementally over time and they will pay more if their business grows. So it is entirely possible that $40 million goes higher to the degree that for example their SUSE Linux business is successful."
Kaefer continued, "These payments tend to relate not only to the size of the patent portfolios of the two parties, but also to the amount of product that each party ships. So as you can imagine Microsoft ships much larger set of software -- a much broader portfolio -- significantly more units of that and there is significantly more money attached to that in revenue."
"So what we believe is that by looking at our product portfolios our patent portfolios and netting that out that that is a fair value for what we have talked about and what is being exchanged between the two companies," concluded Kaefer.
In its press release, Novell concluded that "For years, Novell has been a leader in defending the open source community from attacks by those who would harm Linux. Novell's strong challenge to SCO [story], which began in 2003 and is ongoing, our debut of indemnification of customers for possible copyright infringement claims in early 2004 [story], our patent policy adopted in 2004, and our co-founding of Open Invention Network [story] in 2005 all speak to our strong commitment to the community. This latest business transaction, which promotes interoperability between proprietary and open source solutions, takes that commitment to another level, this time by focusing on the IT needs of our customers."
-- Steven J. Vaughan-Nichols. Additional reporting by John Pallatto.
Get the whole Novell/Microsoft picture here:
The Novell/Microsoft Linux Deal Reading List
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