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05.30.07

New Articles on Novell and Patents (Updated)

Posted in Novell, Patents at 3:15 pm by Dr. Roy Schestowitz

Having made some documents available, the main discussion revolves around how Novell’s deal affects patents (and what Novell intends to do about them). Here is a collection of articles that cover this issue.

Eben Moglen: MS should remove patents from Novell agreement (video)

In this segment of our week-long series of video excerpts from our interview with Professor Eben Moglen at last week’s Red Hat Summit in San Diego, he explains why it could be disastrous for Microsoft to continue the patent aggression that is part of their Novell agreement.

Kill the patents, kill the problem

Whatever Novell’s motivations in its dealing with Microsoft and subsequently with the EFF, the fact remains that if software patents are shown to be the harmful and counterproductive mistake we believe them to be, the industry will benefit in many ways. The community must remain united with this in mind. Nothing else matters.

The Patent Puzzle

Patent fights are fights about money. The secondary issue, the one that makes the headlines, is control. To really understand what’s going on in the current patent posturing involving Microsoft, Novell, and a host of open-source companies and groups, it helps to keep those factors firmly in mind.

Novell Tries Striking Delicate Balance on Patents

So when Microsoft claimed Linux and some of its open source programs violate 235 of its patents last week – and held up its agreement with Novell as the template for the royalty payments it wants from everybody – Novell must have wanted to hide under the bed wrapped in a flame mail-retardant blankie.

Novell: GPLv3 Could Be Risky Business [to Novell, not to Linux]

The FSF believes that the patent agreement between Microsoft and Novell, in which both parties agree not to sue each other’s customers for patent violations, is a collusion that undermines the goals of the FSF. GPLv3 is designed to prevent other such agreements from occurring between patent holders and open source distributors.

On a related note, here are a few other new articles that talks about patents and their morbid effect.

Nokia says patent dispute hurts 3G

The success of 3G phone technology is being put at risk by a patent dispute between Nokia and Qualcomm, Nokia said today.

aQuantive is not a Microsoft open source play

Given that software patents are not accepted in Europe (or most of the rest of the world) it means enforcing Microsoft’s patents would impose an enormous burden on the American economy, and on America’s global competitiveness.

UK firms contest ‘absurd’ software patent ruling

The five companies, Astron Clinica Limited, Cyan Holdings Plc, Inrotis Technologies Limited, Software 2000 Limited and Surf Kitchen argue variously that the IPO is stifling British entrepreneurship, forcing UK firms to apply for patents outside the UK, and putting British inventors at a disadvantage.

Further analysis at Groklaw:

Worst-Case Scenario or Sure Shot? – More on the Novell-MS Deal

So, the way this all adds up to my understanding is that it’s certain to happen. It’s not just a worst-case scenario. It’s a train coming straight at Microsoft’s patent threats, and I’m guessing Microsoft is trying to figure out how to untie itself from the track. No doubt Microsoft will in time address the matter and say something, but I can’t help but think that the current “but we never meant to rattle our patent saber” talk may stem from an awareness that the game is over, or at least this part of the game.

Update: the Eben Moglen video is now up for viewing in embedded form.

Forbes Says Novell’s Business Stinks

Posted in Finance, Marketing, Novell at 3:03 pm by Dr. Roy Schestowitz

This seems like a harsh article, but you may still wish to take a quick look.

Unfortunately for Novell, business isn’t good. Analysts expect the company’s second-quarter earnings will come in around $4.7 million on Wednesday–that’s a drop of of 50%. Worse yet, sales are set to slide to $235.1 million from $278.3 million. As a result, over the past year Novell’s shares have plodded along, dropping from $7.82 to $7.55.

[...]

The company could start buying back shares or it may even reward open-source developers with a few acquisitions, analysts say. Spreading a little of its money around in the open-source community may not make it any more popular, but at least it won’t be the only software company accused of selling out

This confirms the possibility of buybacks, which was mentioned last week.

Noteworthy: Novell’s (and Microsoft) Betrayal Illustrated Using an Analogy

Novell Licensed MS Patents for Virtualization

Posted in Deals, Deception, GPL, Intellectual Monopoly, Microsoft, Novell, Patents, SLES/SLED, Virtualisation at 9:51 am by Shane Coyle

It appears that Matthew Aslett has put his finger on at least one bit of Patent IP that Novell has licensed from Microsoft, as well as a little bit about what the deal was really about.

In the meantime, the publication of the agreements also sheds some light on the suggestion that the patent cooperation agreement was necessary for the technical and business collaboration agreements to have occurred.

The patent deal is listed as a pre-requisite for both the other deals, while the technical collaboration agreement was also a pre-requisite for the business collaboration agreement, placing the patent deal at the center of the whole deal.

While the patent covenant included an agreement from each party not to sue each other’s customers, there was also a limited patent deal between Microsoft and Novell, as previously reported. According to the technical collaboration agreement, that patent deal related to Novell getting a free pass on patents related to the HyperCall API specification in order to make SLES run on Microsoft’s Viridian virtualization hypervisor.

I had said the other day that Microsoft is indeed very disturbed by Wine, as is evidenced by the non-redacted portions of the agreement, because it allows users to run their Office toolset without running (and paying for) Windows. Part of the Microvell deal is about virtualization, and keeping Windows relevant and installed by using legal posturing and FUD, which Novell is all too happy to assist with since they are in the unique position to benefit from Microsoft’s FUD campaign against Linux.

So, have a look at the technical cooperation agreement (S3 & S4 are most interesting). Already, GPL fans who are familiar with the Binary Driver debate will note the use of the term "shim".

(c) Development of the Novell Shim. Microsoft hereby grants to Novell a non-exclusive, non-assignable, non-transferable, royalty-free fully paid-up license

(i) under (A) Microsoft’s trade secrets and copyrights to internally use and reproduce the Microsoft HyperCall API Specification for the sole purpose of developing the Novell Shim; and (B) ***, under Microsoft’s trade secrets and copyrights (to the extent the Novell Shim is a derivative work of the Microsoft HyperCall API Specification), to ***; and

(ii) under Microsoft’s Necessary Claims, to (A) make and use the Novell Shim in Source Code and Object Code form, and (B) ***.

If and when Microsoft makes an implementation license for the Microsoft HyperCall API Specification publicly available, then Novell may enter into such license to obtain any additional rights that may be available thereunder.

This does give some more context to Stafford Masie’s statements at CITI regarding how one aspect of the deal was that Microsoft and Novell were teaming up to go after VMware.

(a paragraph or two before it cuts off.)
…virtualization is very very key, customers want to utilize Linux as either a host operating system with Microsoft as a guest operating system, or vice versa, and yes wea re going to support the XEN technology there, the XEN hypervisor technology, Microsoft is going to support it too. Yes, there is a competitive angle there, yes we’re coming at VMware yes yes yes we are, ok thats part of it because but we’re doing it in an open source way, so were going to support the XEN technologies in our server platforms and togther collaborate and ensure it works properly, supported properly, etc

Note that this is a "non-exclusive, non-assignable, non-transferable, royalty-free fully paid-up license", so this is not the reason that Novell has agreed to pay Microsoft royalties on open source software shipped under the agreement.

Novell is paying Microsoft royalties in exchange for a right-to-use license for their customers, just no one is quite sure what it is of Microsoft’s that they have a right-to-use.

05.29.07

The More They Say About Patents, the Less You Know

Posted in Deception, Intellectual Monopoly, Microsoft, Novell, Patent Covenant, Patents at 9:25 pm by Dr. Roy Schestowitz

Matt Aslett dives into Novell’s ‘document *** dump ***’ and gives his opinion on the findings.

While there is a short section on licensing of intellectual property rights for Microsoft technologies to be used internally in Section 4, that’s about it in the technical collaboration agreement.

One section of the business collaboration agreement also worth a look is Section 9, Indemnification/Infringement Claims, because this is where you would usually expect to find details of patent-related issues. Anything potentially interesting there is redacted, however, so one can only guess what it actually does cover.

As expected, the document does not say enough to be truly useful. Meanwhile, Gartner analysts, who are notorious due to close ties with Microsoft, add their usual bias.

Asheesh Raina, principal research analyst for Gartner’s Software Group said, “We believe that Microsoft is strengthening its patent portfolio to rectify the exploitation of its Intellectual Property (IP) by technology providers that generate substantial revenue from OSS including Linux.”

“Exploitation”? Does the analyst care to be specific? Well, the apple does not fall far from the tree.

If the paper would prefer not to quote an analyst who has experience with a client, it did a poor job. Silver is Gartner’s vice president in charge of client computing. Microsoft happens to do lots of business with Gartner and also happens to have a client-software monopoly. We’re guessing that Silver knows Microsoft’s products well and has direct involvement with the company.

And, sure enough, he appears a number of times on Microsoft’s own site and thousands of times in stories about Microsoft.

Jim Murphy – wait for it – covers Microsoft too and is even more prolific than Silver.

[...]

Part of the problem stems from the reticence of companies such as IDC and Gartner to reveal their clients. That should make everyone nervous, but it doesn’t. So called objective technology publications keep publishing material bought by vendors without telling you this. They’re also too lazy or scared to ignore the likes of Gartner and IDC until the firms change their disclosure rules.

It is worth repeating: when it comes to the Novell/Microsoft deal, do not trust anything that you see in the biased and financially-motivated mainstream media.

Novell is Operating at a Loss (Updated)

Posted in Finance, Marketing, NetWare, Novell at 9:08 pm by Dr. Roy Schestowitz

HSBC, which picked SUSE Linux a few months ago, has just reported great growth (in terms of online activity at least), but the same cannot be said about Novell. Someone has wrestled with the numbers and came to the conclusion that “Novell’s First Quarter Goes into the Red”.

In the first quarter of fiscal 2007 ended January 31, Novell said that software license sales amounted to $38.5 million, down 9 percent, while sales of maintenance contracts, software subscriptions (which are really for support, not for the open source software itself), and other services came to $191.2 million, down 4 percent. Total sales for the quarter came in at $229.6 million, down 5 percent. While Novell has kept a tight rein on costs relating to the products themselves, the company has increased spending on sales, marketing, development, and general costs; it has also booked a $7.4 million restructuring charge in the quarter and written off $10.8 million in assets. These factors pushed Novell to a $31.3 million operating loss. Because Novell has over $1 billion in cash in the bank and $790 million in short-term investments, it was able to post a $20.7 million gain in investments and it also sold some venture capital funds for another $3.6 million. When all the math was done and the taxes paid, that worked out to a $19.9 million net loss, or about 6 cents per share, compared to a net profit of $1.9 million in the year ago quarter, or 1 cent a share.

Update: The Inquirer has more to say about the figures (slight corrections to INQ banter language).

The thousands of pins stuck into the effigy of Novell by Open Sorcerers seems to have had a dire effect on the company’s bottom line.

The Open Source movement threw up its collective hands in disgust when Novell signed a pact with Microsoft promising not to sue each other over software patents.

Now it seems that Novell’s software license sales have dropped by nine per cent and the company has started to lose cash. Sales of maintenance contracts, software subscriptions are down by four per cent and total sales are down five per cent.

Boycotts seem to have become effective owing to the voices of the Internet.

Motley Fool (fool.com), which has always seemed like a strong pro-Microsoft financial Web site, has its facts skewed.

Novell has shown some real commitment to the ideals of the open-source community lately.

Who are they kidding?

Covenant Not to Sue – Where Have We Heard That Before?

Posted in Boycott Novell, Deals, Deception, Free/Libre Software, GNU/Linux, GPL, Intellectual Monopoly, Microsoft, Novell, Patent Covenant, SCO at 1:26 pm by Shane Coyle

Groklaw has a fascinating (to me, anyhow) piece regarding Chris Sontag’s deposition in SCO v. Novell, in which he apparently talks about SCO’s "Linux License" – a "right to use" Linux, as part of the SCOsource program.

6 Q. Which is the right-to-use license, again?
7 A. The license — the right-to-use license
8 for Linux.
9 Q. The IP license?
10 A. Well, no. The right-to-use license for
11 Linux that provided the covenant not to sue.
12 Q. Is that the Microsoft Sun type
13 arrangement?
14 A. No. That was the license for Linux users.

Now, think about the Microvell deal and the patent covenant – the "covenant not to sue", the one that we now know is definitely not applicable to OpenOffice.org*, StarOffice, Wine or OpenXchange. So, Novell is paying Microsoft per-unit royalties for a right-to-use license for what, exactly?

Given the total lack of specificity in the released agreements, as was expected by all of us cynics, we are still left with mere speculation, something that just doesn’t jibe with an open development community.

Novell, please, all I want to do is "Get the Facts".

* UPDATE: Bruce Lowry has indicated in an update to the Novell PR blog entry that OpenOffice.org is covered for Novell customers as part of the patent covenant, as was initially believed when they announced the deal.

Novell’s Filings Expose Microsoft, Which Apparently Bets on Free Software and Linux

Posted in GNU/Linux, Microsoft, Novell, Office Suites, Servers at 9:52 am by Dr. Roy Schestowitz

There is an interesting batch of revelations in the news today. The first one stems from an analysis of Novell’s filings, which were ‘dumped’ just before the long weekend and revealed some nasty things. On the face of it, Novell’s deal tells a thing or two about Microsoft’s future plans.

Revelations made by Novell could add more fuel to the already well-established rumor that Microsoft is working on a hosted version of its popular Office software suite.

Google might therefore wish to take a closer look at these documents.

Amid Microsoft’s attack on the legitimacy (or cost) of Free software, ComputerWorld comes up with the folowing article:

Top secret: Microsoft’s $6 billion open source play

This month’s announcement by Microsoft to acquire digital marketing services firm aQuantive has revealed little on how the companies will integrate their IT, but inside information indicates the deal may be Redmond’s largest commitment to free software.

[...]

Whether the businesses are complementary or not, Microsoft’s integration work will no doubt involve a lot of open source software used by aQuantive.

Information available from Atlas’ Web site indicates the Internet software company employs extensive use of open source software including Linux, Apache, MySQL, and Solaris.

Software engineers at Atlas’ Raleigh office do client/server development in C and C++, software maintenance and “scripting”, and developing and maintaining custom reporting capabilities.

Interestingly, this is not the first time that Microsoft finds a lot of Linux in its hand. Other than its dependence on Akamai clusters for its Web sites, Microsoft also uses Linux ‘in house’. It even likes it.

What the press statement didn’t mention is that Aruba mobility controllers run the Linux operating system which Microsoft has aggressively targeted as being inferior to Windows as part of its “Get the Facts” marketing campaign.

[...]

Pandey’s appraisal of Aruba’s technology is in stark contrast to Microsoft’s “Get the Facts” rhetoric which places Windows as a more secure, and higher-performing choice over Linux.

It all comes to show us that Microsoft essentially attacks technology which is very much depends on. This is something to bear in mind whenever Microsoft questions the right of Free software to exist peacefully (i.e. without baseless threats of lawsuit).

More Deception, More Silence, More FUD, and More “Gorilla Dust”

Posted in Antitrust, Free/Libre Software, GNU/Linux, GPL, Interoperability, Microsoft, Novell, Patent Covenant, Patents, Samba, Servers at 6:24 am by Dr. Roy Schestowitz

Here is a short summary of the most recent developments, accompanied by selective quotes.

More spin comes from Microsoft under the disguise of pursuing interoperability (which is based on ‘tax’).

Microsoft denies saber-rattling vs. open source

Microsoft Corp. has denied that it is out to resurrect its patent offensive against the open source software community, saying it was actually going for interoperability.

If that is the case, why have Europe’s requests been ignored for seveal years? Microsoft inflated its market share by making its servers incompatible with those of competitors. According to a Samba developer, this was deliberate, too.

‘In the section of the interview from around 33m30s to 39m00 Jeremy Allison reports how he was told that the Microsoft team implementing SMB2 were ordered to “f**k with Samba”.’

In any event, moving on to the next item, Novell refuses to comment further. It believes it has escaped obligation to clarify, at least for the time being.

Novell executives declined to be interviewed about the filings. “We’ve already provided the high-level comments when we announced the deal in November – around making Linux and Windows work better together, the areas of tech cooperation, the covenants not to sue. All the customer-focus stuff that drove the deal,” said Novell spokesman Bruce Lowry. “The agreements provide more meat on the bones in support of those objectives.”

Have a look at this article if time permits it. Justin Steinman’s response seems to imply that it’s fine to let Microsoft eat Linux alive as long as Novell makes a bit of cash. It is unsurprising that a Novell executive has already admitted the deal with Microsoft was a selfish one. To add some balance, here’s a typical response from an apologist for Novell. The business sense there completely neglects to understand that businesses cannot just exploit and punish their supplier — the programmer. That is precisely what Novell has done through its exclusionary and discriminatory deal.

Finally, here is another explanation and another interesting angle on the tactics used by Microsoft.

One of these days, I hope to gain some insight into the mind of Steve Ballmer, the CEO of Microsoft. For years I’ve been trying to understand why these guys continue to pursue their goal of virtual global domination instead of just becoming a valued and trusted member of the greater wired community.

[...]

Their accusation could be what my old pal Ross Perot used to call “gorilla dust.” This refers to the way a great ape will throw dirt and debris into the air during a fight to try and distract his opponent.

It appears as though, while Linux deals with the dust, Novell counts the cash. It accepted an enticing invitation to a room filled with smoke and mirrors. It was blinded by money and in the long term it will pay the price. Although Eben Moglen insists that GPLv3 is not just about Novell, he very recently confirmed that the Novell issue shall be resolved, too.

Professor Moglen explains briefly about GPLv3′s work on globalization of the software license, preventing harm to others by members of the community, and the most contentious in earlier drafts, DRM.

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