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12.29.10

Exploring Novell’s Passing of Software Patents to Microsoft – Now Reported to The Competition Authorities

Posted in Antitrust, Microsoft, Novell, Patents at 6:06 pm by Dr. Roy Schestowitz

Novell on floor

Summary: Novell’s assistance to Microsoft with a patent sale is reported to the German Federal Cartel Office as Groklaw seemingly expresses deep regrets

NOVELL has been called “community rat” by Groklaw and even the mobbyists are noting this. It is depressing to some that Novell did what it did, but it is not surprising to us. If anything, this justifies what we did to weaken Novell over the years, thus limiting the inevitable damage. Some people like Gary Richmond at Free Software Magazine opine that Microsoft may have been behind pushing Novell to sell, and even to sell its patents separately to Microsoft’s consortium (a nice trick by which to avoid antitrust scrutiny as we explained at the time).

Did Microsoft fund this purchase? They have big pockets, pockets big enough to pay the fines imposed in anti-trust cases (although it perhaps should be added that some of the money may be coming from Elliot Associates LP, a hedge fund and major shareholder in Novell). If Microsoft is the financial backer though in this deal it would make sense not to make a direct purchase but to use Attachmate as a proxy to disguise the fact—issues about intellectual property notwithstanding. I wonder if that is the reason companies like Red Hat and Google didn’t step in to buy Novell, especially Google. 2.2 billion is a lot of money but to Google that’s the kind of small change that gets lost down the back of their office sofa and isn’t even worth looking for.

Speaking of Google and their mantra of “do no evil”, is that merely a passive aspiration or should it include or be extended to an imperative “prevent evil from happening”? In other words, should Google have stepped in as a spoil tactic to thwart Microsoft, if only to block them in the same way that a large retail chain will buy up land, not to develop it itself but to prevent their rivals from getting it?

[...]

The free software community has been through this sort of stuff before and eventually saw off SCO and its ilk, so I’m not too concerned at this deal. Yet, you don’t have to be paranoid to be unsettled by any deal that smells of Microsoft. Their track record does not inspire confidence. Don’t listen to what they say. Look at what they do and remind yourself that Microsoft is a money machine and little less. It fits perfectly the description someone made of Goldman Sachs (you know, the ones who helped to bring you the sub-prime crisis):

A great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money

In the light of previous legal fracas, FOSS has developed resources to deal with many eventualities and this is just another one in the seemingly endless battle with patent licenses and necrotic, proprietary behemoths like Microsoft. Still, we’ll all be watching events unfold with a wary eye.

STOP PRESS

Just as I was about to wrap up this article and put it to bed, other wary legal eyes have been poring over the fine detail of the deal. The most important point to emerge from a legal analysis by Andrew Updegrove is that it involves cross licensing all the patents and patent applications—not just the 882 and if the the Attachmate deal fails but the CPTN one goes through this apparently would mean that Novell could only continue in business if it licensed all of its licenses to CPTN. That might not lead to a rerun of the SCO farce but it gives Microsoft royalties leverage.

Tiemann from Red Hat (and OSI) writes: [see LWN discussion]

OSI asks German Federal Cartel Office to investigate CPTN transaction

[...]

The fact that Microsoft was leading the takeover of Novell’s patents was itself alarming to the open source community, but when it was revealed that Microsoft had recruited Oracle, Apple, and EMC to be co-owners of the patents, the OSI Board felt compelled to request that competition authorities take a closer look at the proposed transaction. We found that the German Federal Cartel Office was open to receive comments from the public about this transaction during the month of December, and so we drafted and sent a letter (see attached), outlining our concerns and requesting that they investigate this transaction thoroughly. We have received an acknowledgement of receipt by the department in charge, and we stand ready to offer any additional assistance that may be required by investigators should they ask for such help.

Groklaw’s editor is meanwhile demoralised as we noted some days ago [1, 2, 3]. It realised that it had probably helped Novell in vain and Carla Schroder motivates Pamela Jones to carry on:

Dear PJ: Please Don’t Quit Groklaw

[...]

The biggest reason for PJ to continue with Groklaw is because the truth matters. The outcome of Novell vs. SCO had consequences larger than either company, and Groklaw helped the truth to prevail. Groklaw shed light into a lot of dark mucky corners, and exposed a huge number of outright lies. Did Darl McBride ever utter a word about the case that wasn’t nonsense? Would he have had more credibility without Groklaw tirelessly poking holes in every one of his whoppers? Would we have known he was little more than cannon fodder, the public buffoon face for the real movers and shakers behind the lawsuits?

There have been a number of news stories recently, in typical thoughtless herdbeast fashion, about the decline of Microsoft and how open source has won. Sorry, but it’s not so. Microsoft never stopped with their dirty tricks, and the fundamental, necessary concepts of freedom, software freedom, transparency, privacy, open standards, and truth are under attack on more fronts than ever. Never ever forget that for the predators of big business it’s always about money and power. Always. Never forget that for these, short-term interests always trump long-term, and that rationalizations trump rationality. Never underestimate how cheaply some people will sell out for. Never underestimate the power of justifications and willful blindness for the most heinous actions. Never forget that some people would rather lie even when the truth benefits them more. And never make the mistake of assuming that businesspeople are smart just because they run big businesses. Pushy and amoral are enough to take an ambitious person far.

We need Groklaw, and the Electronic Frontier Foundation, and the Free Software Foundation, and the Software Freedom Conservancy, and the Standards Blog, and Open Invention Network, and all of the many related groups that look out for our interests. They’re more important than ever not only as activists, but as news publishers. The news industry has taken a terrible beating and we have only a tiny remnant of a truly independent tech news press. Which was never very large to begin with.

A lot of people do not know this, but Jones pondered quitting before. We are glad she didn’t. Groklaw is a valuable asset to the Free software community and judging by inactivity that characterised Jones’ absence some years ago (Peter/Mathfox took over temporarily and he is no longer around), without Jones there is no Groklaw, at least not as a site that actively delivers new analytical articles.

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