02.24.11

Only US Department of Justice and German Federal Cartel Office Can Really Stop AttachMSFT Deal

Posted in Deals, Microsoft, Novell, Patents at 6:48 am by Dr. Roy Schestowitz

Summary: Novell’s passing of patents to Microsoft et al. is likely to be the only barrier to Novell’s sale

A COUPLE of new posts, composed by Fabian Scherschel and Steven J. Vaughan-Nichols (SJVN), say a little more about Novell’s claim of getting stockholders’ approval. We wrote about this three days ago, emphasising that several barriers remain (although lawsuits can be resolved by settlement with compensation rather than total withdrawal from the deal). SJVN’s analysis of this is exceptionally comprehensive and relies a great deal on Groklaw:

Novell, which as Pamela Jones of Groklaw points out now describes itself as “the leader in intelligent workload management,” instead of the producers of “best engineered, most interoperable Linux platform.,” still faces anti-trust inquires from both the German Federal Cartel Office and the U.S. Department of Justice.

Neither of these agencies are concerned about Attachmate a formerly obscure software company buying Novell with Microsoft financing. No, the governments; concerns are about Novell’s patents landing in the hands of CPTN Holdings-a company made up of Microsoft, Apple, EMC and Oracle.

For Attachmate to end up with Novell, the patent deal must go through. If Microsoft and friends don’t end up with the patents because of government intervention then the Attachmate deal is dead. Or, as Novell explains it: “The patent sale to CPTN remains subject to the satisfaction or waiver of closing conditions, including receipt of antitrust approval in the United States and Germany. As previously disclosed, Novell and CPTN received a request for additional information from the Antitrust Division of the United States Department of Justice regarding the patent sale. The requests have the effect of extending the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 until 30 days after both parties have substantially complied with the requests, unless the waiting period is earlier terminated. Novell is in the process of gathering information to respond to this request and is continuing to cooperate fully with the Department of Justice in connection with its review. Novell continues to work toward completing the merger as quickly as possible and currently anticipates that the closing of the merger will occur following the completion of the waiting period and the satisfaction of other closing conditions.”

Microsoft MVP and Novell VP Miguel de Icaza is meanwhile expressing DRM tolerance:

I do not mind DRM that much. It sucks when it gets in the way, but all software gets in the way anyways. I like the benefits of it.

Sure he does. Would he not love it if Microsoft took even more control of Novell? It would make him stronger, richer, and more influential. Miguel works for Miguel (and Steve), not for Free software. █

“DRM is the future.”

–Steve Ballmer, Microsoft CEO

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01.11.11

AttachMSFT Needs to Borrow More Money to Buy Novell

Posted in Deals, Finance, Novell at 7:29 pm by Dr. Roy Schestowitz

Summary: AttachMSFT [sic] does not have enough money to complete an acquisition of Novell, so it is reaching out for a loan

IN THE coming days we shall cover the AttachMSFT acquisition of Novell and the barriers which remain, including the important fall of the CPTN deal and the many lawsuits from investors. One of the lesser-discussed barriers is actually financial and according to this report from Bloomberg:

Attachmate Corp., the connectivity solutions provider owned by private-equity firms, is seeking $1.09 billion in loans to finance its acquisition of Novell Inc.

Attachmate is seeking an $825 million first-lien term loan, a $40 million first-lien revolving line of credit and a $225 million second-lien facility, Waltham, Massachusetts-based Novell said today in a regulatory filing.

This was echoed by [1, 2, 3] and for some more recently-written background:

6. Novell, the Waltham open-source software developer that once called Utah home, finally found a mate in Attachmate last month, following an eight-month strategic review. The Seattle firm shelled out $2.2 billion for Novell.

There is a lot more to be said about this planned takeover, but that is a subject for future posts. We still have a backlog of about 20 posts. █

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12.17.10

New Details Surface About Novell/Microsoft/AttachMSFT [sic] Deal

Posted in Apple, Deals, Microsoft, Novell, Oracle, Patents at 2:47 pm by Dr. Roy Schestowitz

Summary: The real face of CPTN, the entity which got Novell’s software patents; more revelations about how Novell’s deal came about

WE HAVE written over 20 posts about the subject since Novell was sold (despite impending litigation) and it was never known to the full extent just what Novell did and where assets were being passed. First there was turmoil over the assumption that Microsoft may have acquired UNIX from Novell. Shortly after Novell was publicly flogged for it the CMO of the company came out with an important statement denying this claim (AttachMSFT [sic] might still sell UNIX though). It was still assumed at the time that CPTN was merely a Microsoft shell [1, 2, 3, 4, 5, 6, 7] as no company other than Microsoft was named as a member. Well, none until now anyway. A group of Microsoft proponents [1, 2] says that Apple, Oracle and EMC are also part of CPTN (not principal ones though) and Groklaw theorises that it’s ill-intended and dangerous to Linux. From its new post on the subject:

So what’s the common interest? “Let’s all kill Android”? There’s a limit on that, in that Google is also an Open Invention Network member, so it has a license to these Novell patents already. Of course there could be more than one theme, virtualization, office suites.

Don’t forget that if you sign up with Open Invention Network before this deal closes, you will have a license in perpetuity to all those patents, and more, and these Machiavellian dudes won’t be able to mess with you. Here’s the article that provides information on where to sign up and who qualifies and what is required.

By the way, Oracle is a member of OIN, so it knows how it works. If it wanted to prevent patent litigation, all it had to do was buy all the patents. So I will assume they plan to use these patents, claiming they belong to the consortium and are therefore not donated to the OIN pool. Alternatively, looking at matters more positively, perhaps it wished to exercise some control over what Microsoft does with the patents.

Groklaw also thinks it’s an anti-Android plot despite the fact that VMware recently released software for Android and all we know about Oracle-Apple is not a sufficiently strong link [1, 2, 3, 4]. Moreover, Oracle has too much to lose if it harms Linux (Solaris notwithstanding). Groklaw is very familiar with the SCOracle [sic] case, which it has been tracking quite closely so far, so Groklaw’s opinion is nothing to sneeze at. From the latest status report at Groklaw:

The Oracle v. Google Java litigation now begins in earnest, with each side offering a proposed protective order, along with a handy table of the disputed provisions. Say, I think Groklaw has a claim for prior art on that kind of table.

Could some rival of Android have motivated Oracle to sue? It’s not possible to tell with any conviction at this moment. The same goes for the Traul Allen case from Interval — a case that was dismissed [1, 2] but Groklaw declared the end of it before it was over for good. By the way, the MSBBC’s coverage of this dismissal was atrocious, as expected. It even glamourised Traul Allen for this pathological, irrational, antisocial behaviour.

In addition to the news about CPTN, there is also news from the VAR Guy, who sheds lights on what exactly was going on behind the scenes when Novell looked for buyers:

Overall, Novell representatives contacted 52 potential buyers. Roughly nine official bidders emerged. So how did Attachmate wind up buying the bulk of Novell’s assets? And what happened to rumored SUSE Linux bids from VMware? In a preliminary proxy statement dated December 14, Novell offers an extensive time line describing how the company’s board of directors, executive team, and external financial advisors pursued potential buyers for the company. The filing is more than 100 pages. Here are some of the highlights, paraphrased by The VAR Guy. Please note:

* The vast majority of the info below is based on information within Novell’s SEC filing.
* Novell protects the names of several bidders, referring to them as Party A through Party E. In some cases, The VAR Guy makes some educated guesses about the actual identity of each company. But The VAR Guy’s educated guesses could be wrong.

Regarding anti-Android lawsuits, Mac Asay [sic] wrote this new article where he claims the lawsuit are evidence of Linux and open source success (it is embedded in almost everything).

Google came up with two on its own – Android and Chrome OS – to cover its bases on encouraging geeks to contribute to Google’s total world domination. And while Chrome OS never quite got out the gate in 2010, despite assurances that it would ship in late fall, Android more than made up for Chrome OS’ delays, with Google’s Andy Rubin tweeting: “There are over 300,000 Android phones activated each day.”

That’s a heck of a lot of phones running open source. Even more than Apple ships.

Apple, of course, didn’t let this open-source momentum go unnoticed, and launched a lawsuit against Google’s Android through its licensee, HTC. Not to be outdone, Microsoft and Oracle also sent lawyers to the Googleplex. About the only company that didn’t is Research in Motion. Nice Canadians.

Not only Linux is a target of such mobile phone lawsuits. There are more new lawsuits right now and they come from Symbian giant Nokia to apply pressure on Apple:

Nokia has just released a press release announcing that it has filed claims in the UK, Germany and Holland, alleging that Apple has infringed on Nokia products sold in those respective countries in regards to technologies used it the iPhone, iPad and iPod Touch.

In response, writes Rupert Goodwins (UK-based journalist): “I find this profoundly depressing. Does history mean nothing in the face of short-term reactive capitalism?

The patent lawyers are watching this carefully (still afraid of losing software patents) and TechDirt jokes that creating flight plans on the Internet is now patented. Hilarious! Sane judges can view this as further evidence of BM/SW patents needing abolition.

Thanks to Kiran Lightpaw for alerting us to yet another example of patents being used to stifle innovation, rather than enable it. It involves a company called FlightPrep, that secured a patent (7,640,098) a year ago, covering generating a flight plan online and filing it online. Basically, it’s one of your typical “just add online and patent it!” patents that never should have been granted. In fact, the patent, which was first applied for in 2001 was rejected repeatedly, and many adjustments had to be made before the patent examiner finally gave them the patent.

Once they got the patent, they apparently started hitting up all sorts of online flightplan services for licenses — even ones that appear to have been online predating some of the claims in their patent. Nelson Minar, who knows more than a little bit about software development, does a nice job highlighting that there appears to be a fair bit of prior art to the claims that were actually approved.

Free software would have won far more easily if there were no software patents, which cannot be justified on economic grounds anyway. Everyone needs to demand elimination of software patents to hasten development and research efforts. Patents help society as much as Wall Street does. █

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11.27.10

Microsoft Sellouts Join Microsoft’s Racket Intellectual Ventures and Not OIN

Posted in Deals, GNU/Linux, Microsoft, Patents, Samsung at 3:55 pm by Dr. Roy Schestowitz

“I’d put the Linux phenomenon really as threat No. 1.”

–Steve Ballmer, 2001

Summary: Samsung signs a patent deal with the world’s biggest patent troll, Intellectual Ventures (which serves Microsoft’s agenda)

Earlier today we wrote about HTC feeding the vultures of Intellectual Ventures, which is somewhat of a Microsoft spinoff and also the world’s biggest patent troll. It’s rather mysterious and we suspect that HTC did not join voluntarily, so maybe it happened after threat of litigation, even by proxy (Intellectual Ventures always sues through one of its 1,000+ satellites). Both Microsoft and Intellectual Ventures use attack dogs to distance themselves from the negative publicity associated with lawsuits. Why did Microsoft and Gates want Intellectual Ventures created in the first place? The founder too came from Microsoft. Perhaps Microsoft can use such a proxy to repeatedly extort companies and elevate the price of its competition, which is gratis under conditions where software patents are not valid.

According to this new report, Samsung decides to “Partner Up With Intellectual Ventures”:

In a move to help steer clear of any more legal trouble, HTC and Samsung have entered into a partnership with Intellectual Ventures to use over 30,000 software patents in their phones, and in Samsung’s case, a myriad of other devices. This is especially handy for HTC who’s faced nothing but legal trouble since they spearheaded the Android movement back in 2008.

HTC sold out to Microsoft some months ago and then signed an Intellectual Ventures deal; Samsung too follows this path, having surrendered to Microsoft without even a fight (in 2007), deciding to pay Microsoft for Linux. Samsung could possibly join the OIN instead of joining the Microsoft racket, but Microsoft and Samsung have resemblances and a long history together (as partners). As shown in the very recent conversation below (full log to be published later), our contributor gnufreex has some ideas about the purpose of OIN and CPTN, which we will write about tomorrow. █

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10.08.10

Microsoft Pays Acacia Again and It Also Pays ACCESS Co.

Posted in Deals, GNU/Linux, LG, Microsoft, Patents, Red Hat at 6:51 am by Dr. Roy Schestowitz

Handouts from Microsoft

Summary: Software patents proponents share their wealth while companies that bring free/libre software to the market get sued

PATENT TROLL Acacia has been agitating Linux for almost exactly three years now and a few days ago it made a settlement announcement regarding Red Hat [1, 2, 3]. Microsoft paid Acacia some months ago and it’s paying it again based on Murdoch’s press and Mary Jo Foley who writes:

Sometimes it’s cheaper to head off a potential problem than fight — a stance the old Microsoft regime would repudiate, but one that the current one increasingly has been pursuing.

On October 7, Microsoft licensed 74 patents for an undisclosed amount with Acacia Research Corp. and Access Co. Ltd, the Japanese company that acquired PalmSource, the maker of the Palm operating system, according to a report in the Wall Street Journal.

Notice the role of ACCESS in there. André Rebentisch from the FFII warned us last year about the patent pools ACCESS or LiMo were getting into. The company was pro-software patents and patent trolls are now using similar tactics to merely extort competitors. It’s a good thing that ALP is dead given the damage its staff was causing to software freedom. “Microsoft pays Acacia,” I pointed out to Glyn Moody, adding that “Groklaw perceives that as Microsoft rewarding those ex-Softies who work in Acacia and sue Red Hat et al.” Moody did not rule out the possibility of it being a factor.

“Acacia has been good to Microsoft as it helped generate Linux FUD for several years, just like SCO did.”Isn’t it fascinating how money can change hands through settlements? Microsoft did not even challenge this, it immediately paid. Acacia has been good to Microsoft as it helped generate Linux FUD for several years, just like SCO did.

In other news, now that Microsoft extorts Android, LG (with a Microsoft patent deal covering Linux) drops some of its Android plans and just a couple of days later initiates a Microsoft co-operation. A reader of ours from Latvia sent us this link. It turns out that some of those companies which signed Linux patent deals with Microsoft were actually quietly sued but settled before this was made publicly known. Melco is reportedly one of those. That’s just racketeering [1, 2, 3, 4, 5, 6, 7] and it’s where Microsoft seems to be going. █

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09.20.10

Centrify and Microsoft Grow Closer With a Software Patents Agreement

Posted in Deals, FUD, GNU/Linux, Microsoft, Patents at 5:35 am by Dr. Roy Schestowitz

Summary: New evidence of the patent trouble which is Centrify

EARLIER this month we wrote about Centrify [1, 2, 3] getting sued for patent violation. Some days ago Centrify strengthened its relationship with Microsoft, too.

“Patent Agreement” called it the press release [1, 2] and Centrify’s many problems are a subject we covered before. In short, as we argued back in January, Centrify is strengthening Microsoft’s patent FUD against GNU/Linux. █

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08.13.10

Novell’s Sellout Options: “Private Equity-backed Company, a UK-based PE Firm and a Joint Bid Between a Publicly Traded Tech Company and a Buyout Shop.”

Posted in Deals, Finance, Novell at 5:54 am by Dr. Roy Schestowitz

Summary: The 451 Group provides insight into Novell’s situation

NOVELL INC. is still up for sale. According to the 451 Group (regarding a sale):

While the process initially attracted a number of parties, we understand that there are only three left at the table: a private equity-backed company, a UK-based PE firm and a joint bid between a publicly traded tech company and a buyout shop. It’s not clear that any of the three will actually close a deal for Novell. (The process has already run past two deadlines, we gather.) Without a deal, shares of Novell would be left to trade on the company’s own merits, which probably wouldn’t do much for shareholder value.

That seems like a significant short report. What is this mysterious “publicly traded tech company”? Maybe Microsoft? There are many more new articles which mention Novell's inability to keep up with expectations (this is still the main news about Novell), e.g.:

i. Software Stocks Losers (MSFT, ORCL, ATVI, NOVL)

Novell, Inc. (NASDAQ:NOVL) is trading 3.01% lower to $5.64. Novell, Inc. develops, sells and installs enterprise software that is positioned in the operating systems and infrastructure software layers of the information technology (IT) industry. The Company operates in four segments: Open Platform Solutions, Identity and Security Management, Systems and Resource Management, and Workgroup.

ii. Trading Update for Novell Inc. (NOVL)

Shares of Novell Inc. slipped $0.23 (-3.95%) to $5.59. The stock closed at $5.82 in the last trading session and today the shares of NOVL opened at $5.73.

iii. AgFeed Industries, Fossil, Novell, Netflix: U.S. Equity Preview

Novell Inc. (NOVL US) slumped 2.7 percent to $5.85. The maker of Linux operating-system software lowered its third- quarter sales forecast to a range of $197 million to $199 million. Analysts were expecting $206.5 million on average in a Bloomberg survey.

iv. “Wall Street regains some ground after Fed remarks

In earnings news, MBIA surged 4.5% after it registered a 45% jump in earnings in the second quarter. Software manufacturer Novell plunged 3.2% after it cut its third- quarter revenue outlook.

Amid negotiations about sale of Novell, sales will continue to disappoint. The official report from Novell is just a couple of weeks away. █

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07.07.10

When Microsoft-Only/Lock-in is Defined as “Technology”

Posted in Courtroom, Deals, GNU/Linux, Microsoft, Open XML, Red Hat at 5:31 am by Dr. Roy Schestowitz

Summary: Microsoft manages to get away with abuse of taxpayers’ money in Switzerland, thanks to an apparent lingual loophole

LAST YEAR WE wrote a lot of posts about Microsoft’s illegal deals in Europe, including the suspicion that it is doing it this year in France and in Italy. Illegality here has to do with the lack of tender and the consideration of just one monopolistic company, to which taxpayers’ money will get funnelled in order to further increase lock-in. One interesting case took place in Switzerland, where the matter was taken into court (just like in Quebec, where Microsoft lost last month [1, 2, 3]). Previous posts about the situation in Switzerland are:

1. Microsoft Sued Over Its Corruption in Switzerland, Microsoft Debt Revisited
2. Can the United Kingdom and Hungary Still be Sued for Excluding Free Software?
3. 3 New Counts of Antitrust Violation by Microsoft?
4. Is Microsoft Breaking the Law in Switzerland Too?
5. Microsoft Uses Lobbyists to Attack Holland’s Migration to Free Software and Sort of Bribes South African Teachers Who Use Windows
6. ZDNet/eWeek Ruins Peter Judge’s Good Article by Attacking Red Hat When Microsoft Does the Crime
7. Week of Microsoft Government Affairs: a Look Back, a Look Ahead
8. Lawsuit Against Microsoft/Switzerland Succeeds So Far, More Countries/Companies Should Follow Suit
9. Latest Reports on Microsoft Bulk Deals Being Blocked in Switzerland, New Zealand
10. Swiss Government and Federal Computer Weekly: Why the Hostility Towards Free Software?
11. Switzerland and the UK Under Fire for Perpetual Microsoft Engagements
12. Lawsuit Over Alleged Microsoft Corruption in Switzerland Escalates to Federal Court

According to Jan from Red Hat, Switzerland is still “0wn3d by Microsoft”:

The court has decided. A tender would be disruptive to the Microsoft-only world of the swiss public. One of five judges disagrees and mentions that this effectively means there is no alternative to Microsoft and that this might not be what a free market is about.

I can only say “Congratulations” to Microsoft. Feel free to cash in the 47 million SFR of swiss taxpayers money and look forward to a perpetuum mobile. You now own the swiss public sector. This is what competition and free market is about?

The trick used here was to say that the BBL wanted to buy a defined “technology”. The “technology” however was the Microsoft range of products. By using this interpretation it was obvious that Open Source solutions cannot compete and therefore a tender was not needed.

This argumentation disrespects a fundamental fact IMHO – this “technology” is not available in a market – it is *only* available from a *single* vendor who sets the price, the features and the scope. With this fundamentally flawed argument Microsoft now effectively is even free to ask *any* price for its “technology”. A single-vendor market is typically not seen as a free market. But I guess in Switzerland they have a different definition in place. Is this a wise use of taxpayers money? I respectfully disagree.

Notice the trick that they use. Microsoft still uses its cult-like ecosystem to pretend that Microsoft is default “technology”; calling Microsoft technology is like calling or referring to Coca-Cola just as “beverage”. Red Hat et al. will hopefully appeal this decision if they can. This is similar to the case in Quebec — a case that Microsoft lost.

As Pogson put it yesterday:

The only thing preventing total collapse at the moment is the loyalty of the “partners” who are solidly locked in.

Microsoft partners too are a threat to Free software. That is why we mention companies like Novell too, for their contribution to Microsoft with Mono and Moonlight for example. Microsoft partners are part of the problem and Swiss partners of Microsoft were also playing a role in this country's crooked vote on OOXML. █

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