Department of Justice says Novell and CPTN must change patent deal

The US Department of Justice has announced that for the Novell/CPTN patent deal to go ahead, it is requiring major changes to the deal because as originally proposed, "the deal would jeopardize the ability of open source software, such as Linux, to continue to innovate and compete."

The Novell/CPTN deal was part of the agreement created in November to allow Attachmate to acquire Novell; before the $2.2 billion acquisition went ahead, Novell was to sell 882 patents to CPTN, a holding company owned equally by Microsoft, Oracle, Apple and EMC, which would then allocate and distribute those patents between the CPTN owners. In January, the Open Source Initiative and the Free Software Foundation jointly asked the DoJ to intervene in the deal saying that the confidential negotiations taking place could "be used to hide nefarious intentions". The OSI had also written to the German Federal Cartel Office in December.

The DoJ, working closely with Germany's Federal Cartel Office, appears to have agreed with the OSI and FSF's view of the deal, and is requiring major changes. Most importantly for open source developers, the agreement now says that all of the Novell patents will be "acquired subject to the GNU General Public License, Version 2, a widely adopted open-source license, and the Open Invention Network (OIN) License, a significant license for the Linux system". The announcement does not specify how these licences, especially the GPLv2 software licence, will apply to the patents. There would also be limits on CPTN, and it's owners, from limiting which patents are included in the GPLv2 and OIN licensing process or influencing the process.

Other changes appear to be contistent with earlier reports of modifications proposed to the deal. These include the deal now seeing Microsoft selling all the Novell patents it would have acquired to Attachmate, while retaining a licence to use those patents and the patents of the other three members, and EMC being blocked from acquiring 33 patents which were identified as related to virtualisation. With the changes in place, the Department of Justice is prepared to allow the transaction to proceed, but says it will continue to investigate the distribution of the Novell patents to the CPTN owners.

(djwm)