Bonum Certa Men Certa

Novell and Microsoft: All About Cooperation on (Intellectual) Monopoly

handshake black and white



THE OSI called it "Monopoly 2.0", whereas others call it a duopoly. Either way, the deal that Novell signed with Microsoft was intended to give power to Microsoft in exchange for 'kickbacks' (or financial benefits), cumulatively funneled into Novell in the form of SUSE coupons, which Microsoft outwardly calls "patent royalties". This horrible deal is still mentioned in Novell's annual report, the last of which was released yesterday. A summary of it can be found in MarketWatch or Yahoo and the full report is on EDGAR.



Along the way we also came across this older SEC filing, which shows very clearly that the Novell/Microsoft deal is all about patents (text below), not about so-called 'interoperability'. The story Novell 'sells' to the public is very different from that which is must tell investors, simply because it's the law. Recently, however, we revealed how Novell was working behind the scenes. The story told even to customers changed to include the "peace of mind" chorus. Ian Bruce and Roger Levy already do that [1, 2]. They sell fear because selling just a product was not good enough (Novell is down, Red Hat is up).

Anyway, from sec.org:

MICROSOFT – NOVELL PATENT COOPERATION AGREEMENT



This patent cooperation agreement (“Agreement”) is effective as of November 2, 2006 (“Effective Date”) by and between Microsoft Corporation, a Washington corporation having a primary place of business at One Microsoft Way, Redmond, Washington, USA 98052, and Microsoft Corporation’s Subsidiary, Microsoft Licensing, GP, a Nevada General Partnership having its primary place of business at 61000 Neil Road, Reno, Nevada, USA 89511 (“MLGP”) (collectively, “Microsoft”), and Novell, Inc., a Delaware corporation having a primary place of business at 404 Wyman, Waltham, Massachusetts, USA 02451 (“Novell”). Microsoft and Novell are herein referred to separately as “a party” or collectively as “the parties” and when capitalized as “Party” or “Parties” also includes their respective Subsidiaries.

RECITALS



Microsoft Corporation is the owner of its Patents (as defined below); and has licensed the rights to commercially exploit its Patents to MLGP.

The Parties acknowledge the ownership or control of Patents and a desire to grant rights to each other’s Customers and make certain accommodations to each other under certain such Patents.

The Parties expect to continue research and development that will result in ownership or control of additional Patents and therefore desire to grant rights to each other’s Customers and make certain accommodations to the other Party under certain such additional Patents.

In consideration of the mutual covenants and conditions stated herein and for good and valuable consideration, the Parties agree as set forth herein.


The Novell/Microsoft deal was about software patents. It's time to stop denying it and portray the deal for what it really is.

“The only patent that is valid is one which this Court has not been able to get its hands on.”

--Supreme Court Justice Jackson



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