For some reason, Novell's PR Blog is stating that their take away from the Final Call Draft of GPLv3 "will not interrupt [their] partnership with Microsoft". So, if Novell's assertion is true, this means that Microsoft is entirely comfortable with Novell passing on the (formerly discriminatory) patent covenant to all downstream users:

If, pursuant to or in connection with a single transaction or arrangement, you convey, or propagate by procuring conveyance of, a covered work, and grant a patent license to some of the parties receiving the covered work authorizing them to use, propagate, modify or convey a specific copy of the covered work, then the patent license you grant is automatically extended to all recipients of the covered work and works based on it.

The "Redmond Wall" has fallen, it's Patent Detente Everyone! Woohoo!

Of course, as Paul McDougall points out, that just doesn't sound like our friends from Redmond, especially given their recent acerbic statements.

Microsoft claims to own 235 patents that are infringed by open source software, including Linux. In November, it cut a deal with Novell under which it agreed not to sue Novell's Linux customers. In exchange, Microsoft gained the right to resell Novell's SUSE products and services at a markup.

So much for that.

If GPLv3 stands in its current form, it would appear to leave Microsoft with two choices. It can give up its patent claims on Linux and continue its partnership with Novell. Or it can terminate the pact. Given the way Microsoft jealously protects what it says is its intellectual property, I'm betting on the latter.

That's bad news for Novell.

McDougall also brings up something I had wondered about recently, namely the deferred revenue that Microsoft already paid to Novell in advance for the 5 years of coupons - money Microsoft will probably want back if Novell needs to adjust or cancel the deal. Then, how much worse do Novell's numbers get?

Who didn't see this coming? Even Novell knew it was possible:

If the final version of GPLv3 contains terms or conditions that interfere with our agreement with Microsoft or our ability to distribute GPLv3 code, Microsoft may cease to distribute SUSE Linux coupons in order to avoid the extension of its patent covenants to a broader range of GPLv3 software recipients, we may need to modify our relationship with Microsoft under less advantageous terms than our current agreement, or we may be restricted in our ability to include GPLv3 code in our products, any of which could adversely affect our business and our operating results. In such a case, we would likely explore alternatives to remedy the conflict, but there is no assurance that we would be successful in these efforts.

The other day, I had stated that the FSF would determine Novell's fate, but I misspoke: Microsoft will determine Novell's fate, just as we always suspected.