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Microsoft limited in its Novell patents purchase

Novell and CPTN agree to change a deal for the Microsoft-organized consortium to buy Novell patents

Microsoft will not be able to keep patents it proposed to buy from Novell under an agreement with the U.S. Department of Justice announced Wednesday.

Novell, distributor of the SUSE Linux OS, has agreed to change its proposed deal to sell patents to CPTN Holdings, a Microsoft-organized consortium of companies, in order to satisfy DOJ concerns about the impact on open-source software, the DOJ said.

The agreement with the DOJ will require Microsoft to sell the Novell patents back to Attachmate, which announced in November it was merging with Novell. Microsoft will receive a license to use those patents and patents acquired by the other three owners of CPTN.

Novell has no comment on the agreement with the DOJ, a spokesman said. Microsoft said it was pleased that the patent sale and Novell’s merger are moving forward.

The Open Source Initiative (OSI), a non-profit that reviews open-source licenses, said it approves of the DOJ deal. The agreement shows “open source is a crucial market force, ensuring strong competition, and as such deserves regulatory recognition and protection,” Simon Phipps, an OSI director, wrote on a blog.

The agreement from both Novell and CPTN to modify the deal will not end a DOJ investigation into the sale, the DOJ said in a press release. But the changes will allow the first phase of the US$450 million deal to proceed, the DOJ said. CPTN, owned by Microsoft, Oracle, Apple and EMC, filed paperwork in November announcing its plan to buy 882 Novell patents.

The patent sale, as originally proposed, would have jeopardized the ability of open-source software to innovate and compete in middleware, virtualization, and server, desktop and mobile OS markets, the DOJ said.

“The parties’ actions address the immediate competitive concerns resulting from the transfer of Novell’s patents,” Sharis Pozen, deputy assistant attorney general in the DOJ’s Anti-trust Division, said in a statement. “To promote innovation and competition, it is critical to balance anti-trust enforcement with allowing appropriate patent transfers and exercise of patent rights.”