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OSI Takes Credit for Changing Novell Patent Deal

Mueller figures the deal, as encapsulated by OSI, is probably going through, probably by April 12, as previously reported

The Microsoft-led deal to buy 882 Novell patents for $450 million so Attachmate can buy Novell for $2.2 billion has changed according to what the Open Source Initiative (OSI) - which objected to the deal from the beginning - said Friday it was told by German regulators at the Federal Cartel Office (FCO) - and OSI is taking credit for the changes even though, if it had its druthers, it would completely gut the thing.

The German Bundeskartellamt isn't believed to have demanded any concessions; they were more likely the work of the Justice Department, where OSI also lodged a complaint.

Anyway, this is what is now known about the deal from OSI and the "non-expert summary" it was given by the FCO:

  • First off, Microsoft, Oracle, Apple and EMC, which banded together as the CPTN consortium for purposes of the transaction, will only hang together long enough to split the patents four ways, a process that should take no longer than three months. OSI says this means they "will not form a new long-term patent troll," its abiding fear.
  • Each of the four gets a perpetual license to the whole stash.
  • Microsoft will sell its 25% share of the patents to Attachmate, keeping only a defensive license (presumably, from what is already known, for ~$112 million of Novell's own money less a contribution to that ~$112 million from Elliott Associates in return for a bigger piece of Attachmate).
  • None of the 31 patents that relate to virtualization will go to EMC, which owns the lion's share of virtualization maven VMware.
  • Any sub-licenses and covenants not to sue will remain in place.

OSI's blog (http://opensource.org/node/562), detailing its continuing objections to the deal, runs on but as patent watcher Florian Mueller says OSI doesn't appear to have a legal leg to stand on.

"It seems to me," he says, "that the regulatory agencies have obtained very significant concessions from Microsoft and EMC, and I can't see what else the antitrust authorities could realistically do to address concerns by competitors and open source organizations. OSI still declares itself unhappy, but I believe they must realize that competition law has its limits. I doubt that the regulators could have imposed the changes that apparently occurred to the transaction if they had ever had to defend those in court. To me this looks like a deal that the companies agreed upon in order to avoid further delays, not because of a firm legal obligation."

So Mueller figures the deal, as encapsulated by OSI, is probably going through, probably by April 12, as previously reported.

The stock market seems relatively sure of the same outcome because it's bid Novell's stock up to $6.03, which is close to the $6.10 takeout price.

Mueller suspects that the Fab Four are immune to any patent claims arising from any Novell patent, not just the 882 they're buying.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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