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11.30.06

If Novell’s Patent Portfolio is So Great

Posted in Deals, Finance, Intellectual Monopoly, Microsoft, Novell, Patent Covenant, Patents at 3:29 pm by Shane Coyle

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.

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A Single Comment

  1. Shane Coyle said,

    May 25, 2007 at 10:54 pm

    Gravatar

    Rather than a settlement, it appears that Novell licensed some Microsoft IP for the "access necessary for the technical collaboration to deliver interoperability between Windows and Linux."

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