Where is the Microsoft royalty? Maybe I have missed it, but I can’t for the life of me find where in the patent cooperation agreement it says that Microsoft is making any royalty payments for Novell’s “IP” going forward. It clearly states Novell will be paying a royalty, but I haven’t seen mention of the Microsoft payments. Anyone that can help me out?
Novell keeps trying to spin the deal by saying that Microsoft’s huge up-front equalizing payment is indicative of their patent portfolio strength, but this is in contrast to the reason provided by Microsoft’s Brad Smith at the news conference on November 2:
But, as you’ll see in the press release it makes clear that on the patent side, we dealt with both of these sides of the equation. We dealt with the need for an up-front balancing payment, a balancing payment that runs from Microsoft to Novell, reflecting among other things the large relevant volume of the products that we have shipped. And you’ll see, as well, an economic commitment from Novell to Microsoft that involves a running royalty, a percentage of revenue on open source software shipped under the agreement.
This smells like a settlement, worded and constructed so as to pass GPL muster, but absent of a reciprocal royalty payment from Microsoft to Novell, it sure looks like Novell settled a patent infringement suit with Microsoft instead of reaching a mutual cooperation agreement.
Corel has just announced that it would support OpenDocument (ODF) format, as well as Microsoft’s competing format. OpenOffice, on the other hand, based on Novell’s Web site, will remain committed to OpenDocument format. And yet, the recent deal with Microsoft suggests that OpenOffice will also add Microsoft’s format, which is perceived as ODF-hostile. It gives Microsoft control over the standard and it is not supported by other office suites. This could soon eliminate interoperability. It not intended to happen; not before the deal with Microsoft anyway. I am reminded of the following chain of stories thanks to a friend of mine.
LinuxWorld: With the recent investment by Microsoft (in Corel), many people in the Linux community are concerned about your various Linux projects getting derailed. What effect will there be on your Linux ambitions?
Rene Schmidt: Essentially, with Linux, we are very committed to it. And with Microsoft is not anti-Linux or anything. It is really about .Net. It is really about the Web…. [Linux is] not really any different than any other platform, whether it is a Macintosh platform or a Windows platform that provides services through the application. So from our point of view it is not something that hampers what we are doing on Linux. In fact, it provides new opportunities in Linux.
LinuxWorld So your next release of Corel Linux will come out on schedule and as planned?
Rene Schmidt: Yes. We are working on a server edition and we are also working on an enhanced version of the desktop and the server combined together to provide enterprise solutions. They are slated for next year.
Government lawyers want to know more about a deal in which Microsoft gave Corel, perhaps best known for its WordPerfect program, $135 million in exchange for 24 million shares of Corel stock last October.
After the investment, Corel announced it would retreat from developing software designed to run on the Linux operating system, which competes with Microsoft’s Windows operating system. Linux is favored by some in the high-tech industry because it opens up a blueprint of its code to the public, in an “open source” model.
Iowa Attorney General Tom Miller said yesterday that he and a coalition of 17 other states and the District of Columbia that have sued Microsoft for other antitrust violations plan to look into the Corel investment as well. “We’re particularly concerned about any adverse effect on Linux,” Miller said.
Another case of acquiring your competitors to elbow rivals out of the way, eh? Novell is Microsoft’s weapon against the Linux community. I strongly advise you to boycott Novell before it’s too late.
The research firm has conducted its Open Source/Linux Development survey 14 times over the last 7 years. Although the firm limits the survey to developers with Linux experience, “Historically, the target platform was dominated by Windows,” says John Andrews, principal analyst with Evans. “Regardless of what kind of developer you are, you’re still trying to make a living, and target the operating system that’s controlling the market.”
However, in the most recent survey, the developers’ forecast of their target platform has changed. For the first time, these developers said that in the next 12 to 18 months they expect to be developing more Linux apps than Windows apps.
Some quick stats from the article:
Among Linux Developers, Desktop apps are now the #3 most planned project, trailing Web-based and Rich-Client apps, but ahead of Database apps
Open Source is has more ‘traction’ outside of North America.
The three reasons for coding in open source: “the philosophy of open source, open access to the source code, and cost savings”, and all are considered equally among respondents.
69% of the organizations will be considering Firefox, 70% will consider open-source application development software.
Linux is the best OS for the majority of applications: It’s their top pick for Web-related apps (68%), embedded systems development (61%), and high performance computing (HPC) (56%). Linux is also a popular selection for personal productivity apps (44%).
There is more, including how the developers consider Linux to be more secure than every flavor of Windows, Mac OS X and even Unix. 81% of respondents state their Linux servers have “never been compromised by a security attack”.
Overall, this could be a clear signal that Linux and Open Source are reaching critical mass in the marketplace, since even Mr. Ballmer knows the benefits of having Developers!Developers! (My fave)Developers! on your platform’s side.
For those who don’t follow the tech business, Ballmer and Microsoft signed a deal with Novell in which the two sides mutually agreed not to sue one another over patent claims. Then he turned around and claimed that, unless companies were running Novell’s version of Linux, Microsoft might sue them for violating its patents.
Now witness the market reaction. Novell backed away from Ballmer’s claims. Other Linux distros, like Ubuntu, began using the deal in the market against Novell. They are getting a good hearing. The result could be that Novell, which signed with Microsoft because it is a financial laggard, may be destroyed by its own lifeline.
As I wrote on my other blog today, something quite similar is happening regarding attempts by vendors to add “gotchas” in open source licensing contracts. There is a community consensus on what open source means, thus a market consensus on what it means, and anyone who violates this consensus risks the rejection of its market.
Blankenhorn actually compares Microsoft’s bullying tactics to those of the Bush Administration (Ouch!), saying that while Microsoft may be employing the “law”, the market is refusing to go along. Silence is Acceptance, speak out and let Novell and Microsoft know that their attempt to circumvent the GPL is unacceptable – Boycott Novell.
In another article, also by Blankenhorn, he offers the following cautionary statement for Novell, Microsoft and any other Fairweather Friends of Open Source who have plans of coopting the community using legal tactics and license “gotchas”:
Lawyers lay great plans, but the market and the community are the real forces of nature in open source. You violate a consensus at your peril.
In a case which is in no way directly related to software, actually it is about automobile gas pedals, Microsoft and other tech giants are weighing in in a patent dispute case that is likely to set a tremendous precedent.
On one hand, technology companies are sick of getting sued, often by patent squatters that don’t really make much of anything but go around patenting the schemas for products that other companies are (often independently) working on and then clean up in patent lawsuits. Tech companies would like to see some sort of flexibility built into the patent system so that it’s not so easy to patent just anything and then sue later on when somebody who’s actually creating something happens to come up with that same thing or something similar to it. Sounds pretty straightforward, right? Well, on the other — also very powerful — hand, drug and chemical companies want to protect their products from generic competition and counterfeiters, and patents offer the strongest form of protection. So there’s a battle shaping up here that could profoundly affect some of the world’s most powerful corporations. In other words, it’s worth paying attention to this.
It should be noted that all throughout the Novell-Microsoft deal, both companies have repeatedly asserted that no in-depth review of patent portfolios took place, because each knows that there are “legitimate questions about patent quality” that would need to be addressed. Instead, each company opted to purchase a pig in a poke, so to speak, knowing it is easier to negotiate a preemptive peace rather than risk war and learn you haven’t any munitions.
There, of course, is a small problem with this industry methodology: small, upstart companies have an impossible barrier to entry. As the tech giants continue to obtain and leverage dubious software patents, using cross-licensing deals to create a cartel that will ensure that these same companies continue to live on and derive revenue long after they have ceased to innovate.
David Kaefer of Microsoft indicated himself that the prospects of conducting a patent review for any given piece of software is “prohibitive”, requiring you to review “thousands of patents”. If Microsoft hasn’t the legal resources to conduct such a review, how could a startup company in their garage be expected to?
Asked whether Microsoft would consider revealing what parts of Linux allegedly violated the company’s intellectual property so that open-source developers could throw out the offending code, Kaefer demurred, saying it would not be “very productive.”
“Patents are hard to understand. You have to have a certain level of expertise to understand the scope. And there are legitimate questions about patent quality,” he said. “The reality is that you’d have to look at thousands of patents and thousands of products. To focus on every single one would be prohibitive.”
It is a sad statement on the state of the industry that more and more companies are making money from patents and intellectual property not by making products with them but by threatening other vendors who may be infringing those patents.
Perhaps, after losing yet anotherPatent infringement case themselves, threatening the distribution of their cash-cow Office in Korea, Microsoft is starting to see the state of the industry as well.
This fresh press release from Novell certainly changes the tune. No longer does Novell boast bringing SUSE Linux to schools and governments. For a change, Novell considers Windows as part of its infrastructure.
Whether it’s surprising or not probably depends on whether you have been a skeptic or a supporter or the deal. As Shane pointed out last night, Ron Hovsepian perceives that as the company’s new strategy and direction. On the face of it, Novell intends to virtualize Linux within Windows.