Open Source Blog

So what did Novell get via its patent deal with Microsoft?
May 29, 2007

I've recently been investigating the suggestion that “The cross-licensing agreement that Novell signed with Microsoft, was necessary as Novell required sanctioned access to Microsoft’s code in order to develop open source interoperability”.

During the investigation I received confirmation from Novell that their agreement gave Novell's engineers access to Microsoft's code as well as clarification from Novell on a couple of points.*

As I wrote in that last posting, to my mind that clarification seemed to “undermine the suggestion that the patent covenant agreement was somehow necessary for the technical collaboration”.

What I was overlooking was that a legal agreement can be self-fulfilling. That is to say: the patent covenant agreement was necessary before Novell and Microsoft could enter their technical and business collaboration agreements because the technical and business collaboration agreements said it was.

While the publication of the agreements reveals little about the patent covenant agreement not to sue each other's customers that was not already known, we do get to find out a littl more about the patent deal between Microsoft and Novell.

Starting with the 'necessity' of the patent covenant, we find in section 2 of the technical collaboration agreement that:

“The parties acknowledge that such Patent Cooperation Agreement is a pre-requisite for the parties to enter into this Agreement and the Business Collaboration Agreement described in Section 2.2 below.“

In the same section of the business collaboration agreement we find that:

“The parties acknowledge that such Patent Cooperation Agreement is a pre-requisite for the business collaboration contemplated in this Agreement.”

And also that:

“The Technical Collaboration Agreement is a pre-requisite for the business collaboration contemplated in this Agreement.”

There is no such section in the patent cooperation agreement, suggesting that it is the linchpin on which the whole thing hangs.

Nevertheless, as my colleague Kevin Murphy reports, the patent agreement does state:

“Nothing in this Agreement shall imply, or be construed as an admission or acknowledgement by a Party, that any Patents of the other Party are infringed, valid or enforceable.”

Which Steve Ballmer might like to consider the next time he is moved to say something along the lines of “They've appropriately compensated Microsoft for our intellectual property” or “we are appropriately compensated for the use of our intellectual property.”

Anyway, back to Novell's 'sanctioned access” to Microsoft's IP. Recently Novell maintained that its agreement with Microsoft “does not include a broad patent cross license or cross covenant not to sue between the companies.”

The technical collaboration agreement backs that up, with section 1.4 defining “Microsoft's necessary claims” as:

“those claims of a patent or patent application, throughout the world, excluding design patents and design registrations, owned or controlled by Microsoft which would necessarily be infringed by making, having made, using, selling, offering for sale, importing, or otherwise disposing of only those portions of the Novell Shim that implement the Microsoft HyperCall API Specification.”

In other words, Novell gets a free pass on patents related to trhe HyperCall API spec because in order to make SLES run on Microsoft's Viridian virtualization hypervisor, it might not be possible to avoid the patents involved.

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 for the patent cooperation agreement itself, the most interesting thing in what's left of that is probably what is excluded from the patent covenant to customers (more on that here) although Section 4, Releases, is also worth a look.

“The parties, on behalf of themselves and their Subsidiaries, irrevocably release each other and their respective present Subsidiaries from any liability for Patent infringement (including any infringement by Excluded Products) arising prior to the Effective Date,” it reads.

Does that sound like a broad (if historical) patent license?

I don't know, but then it ought to go without saying that I am not a lawyer.

*It is also worth noting that I have asked Microsoft for clarification on a few points as well, so far without response.