US Department of Justice announces modified Novell patent deal

The United States Department of Justice (DoJ) just announced that a deal that originally envisioned the sale of 882 Novell patents has been modified in order to address its concerns. The DoJ also announced close cooperation in this regard with Germany's Federal Cartel Office (FCO; German name: "Bundeskartellamt").

[Update] The German FCO made an announcement of its clearance decision that is materially consistent with the DoJ's announcement. [/Update]

In formal terms, the DoJ's work is not yet finished: its Deputy Assistant Attorney General Sharis Pozen said that "the department will continue to investigate the distribution of patents to ensure continued competition." But in practical terms, this looks like a done deal, and Novell's stock price is now only a hair's breadth below the $6.10 per-share price to be paid by Attachmate, the acquirer of Novell as a company.

[Update 2 on Apr 21] Novell's latest SEC filing just announced that the formal consummation of the patent deal as well as Novell's acquisition is now scheduled for April 27, 2011. Apparently that will be the date barring any unforeseeable events. [/Update 2]

The announcement by the DoJ essentially reaffirms what I blogged about two weeks ago with only smaller changes:

• The DoJ refers to "approximately 882 patents". A Novell SEC filing revealed a few months ago that there was some disagreement resulting from the fact that Novell originally listed some patent applications that were withdrawn or rejected. There were talks between the parties about whether to replace those assets with others, or whether to adjust the price. The word "approximately" suggests that the number may have changed, or may still change, but only slightly in all likelihood.

• There are 33 (not 31 as originally announced by the OSI) virtualization-related patents that EMC won't get to acquire.

• The fact that Microsoft will effectively sell back its allotment of patents is not new. The DoJ's announcement just makes it clearer than the OSI's recent statement that Microsoft is granted a license to all of the patents changing hands (including the roughly 200 patents that Microsoft will own temporarily) as well as "any patents retained by Novell." Considering that Microsoft for hundreds of new patents every month, it seems obvious that they don't have to acquire a couple hundred Novell patents in order to beef up their own patent portfolio. By contrast, Google with its relatively small portfolio would have benefited from such an acquisition in a more significant way, relatively speaking.

• The DoJ mentions some provisions according to which CPTN Holdings LLC and its owners (Apple, EMC, Microsoft, Oracle) won't be allowed to interfere with Novell's relationship with and commitments to the Open Invention Network. In other words, after the acquisition it will be the prerogative of Attachmate (Novell's acquirer) to make a determination concerning Novell's post-acquisition relationship with the OIN. Maybe the original agreements stipulated that Novell would leave the OIN, or maybe there wasn't any such provision but the DoJ was afraid of the patent deal affecting Novell's partnership with the OIN. In my opinion, the flood of patent lawsuits especially in the smartphone space shows that the OIN doesn't deter anyone from asserting patents against Linux and Linux derivatives like Android. Therefore, whether or not Novell continues to be an OIN member doesn't matter too much.

• There's one item in the DoJ's announcement that isn't clear without knowing the details:

  "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"

  Novell made some commitments "subject to" the GPL and the OIN license in the past. It's not clear to me inhowfar the DoJ imposed anything new on Novell or any of the acquirers beyond already existing obligations.

  In its criticism of the deal, the OSI, FSF and others claimed (not for the first time) that they believe the GPL is incompatible with obligations to pay patent royalties. However, the DoJ's announcement doesn't necessarily say that the acquirers of those patents are now required to make those patents available on royalty-free terms to publishers, distributors or users of GPL'd software.

  My guess is that the DoJ didn't support those claims by OSI and FSF that royalty-free is the only GPL-compatible option, just like the European Commission also found that royalty-bearing patent license deals can be structured in open source-compatible ways. In other words, some royalty-bearing deals may not work for open source, but others do. Per-unit royalties could be difficult given the way open source software is shared, but fixed royalty amounts or royalties relative to a company's revenues are possibilities.

  There's a perfect example of patent royalties that were paid on software distributed under the GPL: Red Hat's $4.2M FireStar settlement, which is mostly a patent license deal (just with additional provisions to withdraw a lawsuit). In Eben Moglen's opinion, the related deal would have been compatible even with the GPLv3. I assume that such GPL-compatible patent license deals would still be a perfectly valid option for the companies acquiring those Novell patents if they find GPL'd software to infringe any of those patents. But I don't know what exactly the revised patent purchase agreement stipulates (except for what the DoJ just announced, which is vague).

If any additional details become known, then there may be more clarity concerning the "subject to" language. For now this is all a bit speculative. It also remains to be seen inhowfar the regulatory intervention in this case could backfire on some of the complainants should similar issues ever come up in connection with the aforementioned OIN. Regulators didn't seem to care much about the secondary market of patents in the past. They apparently raised concerns (whether or not those would have been defensible in court is another question) in this case, and who knows what questions may come up in connection with the sale of Nortel's patent portfolio.

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Analysis of new Novell patent deal structure according to OSI statement

Having just read the Open Source Initiative's latest statement on the sale of 882 Novell patents to CPTN Holdings LLC, I see a probability of 90% that the consummation of the transaction is now imminent. There's a deadline on Tuesday, April 12, and most likely the deal will close by then. It seems to me that the regulatory agencies have obtained very significant concessions from Microsoft and EMC, and I can't see what else the antitrust authorities could realistically do to address concerns by competitors and open source organizations.

[Update on Apr 14, 2011] A new SEC filing by Novell shows that the US Department of Justice decided to let the April 12 deadline expire, which means that while the DoJ could theoretically still challenge the transaction, it apparently doesn't have any more objections at this stage. In all likelihood closing is now a mere formality. [/Update]

OSI still declares itself unhappy, but I believe they must realize that competition law has its limits. I doubt that the regulators could have imposed the changes that apparently occcurred to the transaction if they had ever had to defend those in court. To me this looks like a deal that the companies agreed upon in order to avoid further delays, not because of a firm legal obligation.

The Bundeskartellamt (the German Federal Cartel Office) gave the OSI permission to publish its latest submission to the regulators and a "non-expert summary" of how the deal has changed since the original announcement. I previously blogged about that late November announcement, was first to publish the names of the four companies who jointly own CPTN Holdings LLC (Apple, EMC, Microsoft, Oracle), and commented on a statement by EU competition chief Joaquín Almunia, who said the transaction didn't require EU-level notification.

Changes to the deal structure (according to OSI)

The original deal envisioned that CPTN Holdings LLC would become a long-term owner of the 882 patents to be sold under the deal. Now it appears that CPTN Holdings LLC will be dissolved shortly after the transaction. Each of the four owners will

• be granted a perpetual license to 100% of the acquired patents, and

• get to own 25% of the acquired patents,

but

• Microsoft will sell its entire 25% allocation right away to Attachmate, i.e., Novell's acquirer, and

• the parties appear to have promised that EMC's allocation won't include any of 31 patents previously identified by EMC as virtualization-related patents.

The OSI also states that "[a]ll patents will still be subject to all existing licenses, covenants not to sue and similar restrictions." However, I am not sure whether this is any "change". If the license grants made by Novell in the past were already worded in a way that made them survive changes of ownership, then this part is merely declaratory and doesn't signify any modification of existing agreements.

Let me clear up the confusion that may arise from a non-trivial deal structure having changed. Under the deal structure described above, CPTN Holdings LLC will end up like a non-returnable patent bottle, bound to be forgotten, and the lasting net effects will apparently be that

• Novell sells 882 of its patents, but it will retain hundreds of patents and its new parent company, Attachmate, will own 25% of the 882 patents sold (see further below),

• Apple, EMC, Microsoft and Oracle will never have to defend themselves against any Novell patents (not just the 882 that are sold but all others as well),

• Apple buys whichever 25% of those 882 Novell patents,

• Oracle buys whichever 25% of those 882 Novell patents,

• EMC buys 25% of those 882 Novell patents, which can also be any of those 882 patents except that 31 patents identified as virtualization-related (the core business of EMC subsidiary VMware) won't be among them,

• Microsoft's patent portfolio will be the same after all of this as it was before because

• Attachmate, Novell's new parent company, will own the 25% of those patents that Microsoft could otherwise have received as a result of the dissolution of CPTN Holdings LLC.

The resulting relative growth of the patent portfolios of Apple, EMC and Oracle is fairly limited, given that those companies already own large numbers of patents and file for new ones on a daily basis, so if each of them gets to own approximately 220 more patents, it doesn't make much of a difference.

Competition logic

As I stated in a previous post on this subject, I didn't see any deal-specific theory of harm. I certainly support significant parts of OSI's criticism of software patents and would actually like to see them and their member companies communicate those concerns more effectively to policymakers. But I thought the concerns were generic -- relating in principle to all software patents and to all owners of such patents -- as opposed to particular reasons for which the sale of 882 Novell patents to CPTN Holdings LLC would have had to be blocked by antitrust regulators.

There's a vibrant secondary market for patents, and so far I'm not aware of any antitrust intervention against any such transaction. By the way, just to show how much is going on in terms of patent transfers, Google's $900 million bid for thousands of Nortel patents was made public earlier this week. I haven't blogged about that bidding process yet, but I commented on Google's aggressive pre-auction bid on Twitter (as reported by The Guardian's Technology Blog) and I answered questions I received from the Financial Times, the Los Angeles Times, BBC News, and law.com.

I have done a fair amount of work in connection with competition enforcement, and I believe that no one can blame the regulators for having achieved too little in connection with the Novell deal. Realistically, the regulatory agencies would have had a very hard time defending a blocking decision in court. I, personally, doubt very strongly that they could have won such a case. But there is always some leverage in the ability of a competition authority to delay a transaction by additional reviews and requests for information. There are companies that elect, under those circumstances, to make concessions in order to accelerate the process. The changes on which Attachmate, Apple, EMC, Microsoft and Oracle agreed look like what a regulator would usually consider sufficient remedies. And that's why I guess we're only days away from the closing of the deal, which according to earlier reports is scheduled for next Tuesday (April 12, 2011).

While I don't think there was a legally defensible case against the deal even in its originally contemplated form, it's easy to see that the concessions made by the companies reflect the idea that the acquisition of additional patents in a certain field by a company dominant in that field could, theoretically, raise concerns.

Microsoft was found dominant in certain markets by regulators a while ago. While many (probably most) of Novell's patents relate to markets in which Microsoft isn't dominant, my best guess from the outside is that it would have been too time-consuming to sort out exactly which patents relate to Microsoft's core business and which ones don't, so they apparently accepted not to get to buy any of them at all. A recent SEC filing already indicated such a concession.

EMC's VMware subsidiary is a major force in virtualization. I haven't examined that market, but I guess the regulators believed they could perhaps make a dominance case here, which is why VMware accepted to exclude virtualization-related patents from the deal.

Apple and Oracle are free to buy any of those patents because

• at this stage it would be very difficult to claim that Apple is dominant in the market for mobile communications devices as a whole (its market share isn't high enough for a simple, straightforward dominance case), and

• while Oracle may or may not be dominant in the database management systems market at this point, I doubt that any of the patents in question would change Oracle's position in that market in any non-negligible way.

OSI's remaining demands are legal nonsense

In its latest statement, the OSI still makes demands concerning remedies it wants the regulators to impose. I have looked at those and, frankly, those are just a political statement that doesn't make any legal sense whatsoever.

OSI basically claims that even after the changes I outlined above, they still think Novell was a great open source-friendly patent owner and companies like Apple and Oracle, and to some degree even EMC, aren't similarly open source-friendly in OSI's opinion. Therefore, they want commitments that none of those patents will ever be asserted against software published under an OSI-approved license.

There's no way that a regulatory agency anywhere in the free world could put open source software above the law. If you don't want patents to be asserted against open source software, you must abolish software patents altogether (I would love that). But if those patents exist, the use of particular kinds of licenses cannot constitute a carte blanche to infringe patents. Open source must abide by the law, including intellectual property law, and considering how widely adopted open source software has become under the legal framework as it stands, there can be no doubt that open source and software patents cannot only coexist but open source can even thrive despite the existence and enforceability of such patents.

If the OSI had come up with any remedy proposal that would make legal sense, maybe the regulators would have given it some thought and held up the deal. But with demands of the just-wishful-thinking kind, OSI effectively admits that the regulators have done whatever they could, and it's time to move on.

OSI's theories include, among others, the fear that "Oracle [could] take Android down based on legal assertions of Middleware and Virtualization patents [and] would [thereby] significantly weaken [OSI's] efforts in promoting open source to mobile developers." OSI claims Oracle is "dominant" with Java. I think this is just propaganda. I'm sure that Google can work out a deal with Oracle anytime if Google recognizes the rights Oracle asserts and accepts reasonable terms. Android's intellectual property issues are unprecedented, and some of those issues will have very significant impact on the market, but that doesn't mean that companies enforcing their rights in connection with Android are no longer allowed to acquire patents.

Two days ago, the Linux Foundation's Executive Director, Jim Zemlin, said that patent and copyright concerns related to Linux (and Linux-based Android) are just "FUD". I don't agree with Zemlin's unsubstantiated and desperate attempt to brush aside legitimate concerns, and the fact that he feels compelled to make such statements is interesting in and of itself, but by making up unrealistic doomsday theories for Android, the OSI clearly contradicts the LinuxFoundation and exposes itself to accusations of "FUDding" whenever Zemlin gives his next speech.

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CPTN Holdings LLC (acquirer of 882 Novell patents): Microsoft, Apple, EMC and Oracle are the partners according to German antitrust notification

Breaking news: Twitter user @VM_gville (whose account has meanwhile disappeared) pointed me to the website of the German federal antitrust authority ("Bundeskartellamt"), which discloses a merger (or more precisely, joint venture) notification filed a week ago (on 09 December 2010), according to which the four companies behind CPTN Holdings LLC -- the acquirer of 882 Novell patents -- are Microsoft, Apple, EMC, and Oracle. The product market in which the newly formed company plans to operate is defined as "patents".

Three weeks ago I already commented on the recent announcement of Attachmate acquiring Novell and the sale of 882 Novell patents, in exchange for $450 million, to CPTN Holdings LLC. At the time, the full list of CPTN Holdings LLC partners was not known. The entity was described as a "consortium organized by Microsoft."

Just like many people, I was certainly curious as to which companies were Microsoft's partners in this new organization. The group could have consisted of Microsoft plus several considerably smaller companies. But this impressive list of companies shows that Microsoft's partners are very powerful players themselves, true counterweights without a doubt.

When I commented on the original announcement, I wrote that "it's certain that the decisions of the consortium will not be taken by Microsoft singlehandedly. That fact should actually give a lot of comfort even to those who don't want to trust Redmond."

Now that the other companies are known to be such major players, I can only reiterate what I wrote then. I don't know much about EMC other than that it's a very significant company. I do know that Apple and Oracle are clearly companies who have different approaches to some important issues than Microsoft. Within the consortium, the four players will have to agree on a common denominator concerning the patents to be acquired. They've apparently been able to agree that those patents are valuable assets to own. I still don't know the list of those patents, but it's important progress that we now have the names of the companies, thanks to the German competition authority.

I don't have a crystal ball that would tell me what their business plan with those patents is, but those organizations have a track record and, very importantly, they have a reputation to protect. They all want to enjoy excellent relations with software developers, and software developers expect large players to make reasonable and constructive use of whatever patents they own. I guess that's exactly what will happen in this case.

[Update] AllThingsD quotes an anonymous source inside one of the four companies describing this patent deal as "cheap defensive insurance".

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Attachmate, Novell and the sale of 882 patents to CPTN Holdings, a consortium organized by Microsoft

On Monday I attended a European Commission and European Patent Office conference on intellectual property rights and standardization (I blogged about it) when the long-awaited acquisition of Novell was announced. I received questions about it but for lack of information wasn't able to say anything of substance at that point.

Relatively speaking, it's easier to comment on new patent suits because once one obtains a copy of the complaint, there are usually various aspects worth looking into.

Just so you're not disappointed if you read further: there still isn't anything spectacular or dramatic about this Novell transaction and I guess there never will be. But it is an important deal for open source, so I'll sum up what I've read and what I think so far. Let's talk about the projects first, then the patents.

Mono

Miguel de Icaza, a Novell vice president who started the Mono project (a FOSS implementation of the .NET API) and previously founded the GNOME project, reassured the Mono community with this tweet:

"After the Novell acquisition, Mono continues as-is, but our paychecks will come from Attachmate instead of Novell."

A few months ago I disagreed strongly with Richard Stallman after I read an interview with Glyn Moody in which RMS said that developers "shouldn't write software to use .NET. No exceptions."

I don't know if any of those Mono critics will restate their baseless concerns, but at any rate, I believe that the acquisition of Novell is positive for Mono. It ends a period of uncertainty for the brilliant team Miguel leads. Miguel's blog indicates that they are being very productive these days.

SUSE and openSUSE

I remember the time when SUSE was capitalized differently ("SuSE") and often spelled with dots ("S.u.S.E."). That German Linux distribution used to be much more popular in Europe than Red Hat Linux. At an online gaming startup I co-founded and managed in the late 1990s, we used SuSE on our servers. I also ran SuSE on a computer at home (for MySQL).

Later, SuSE was acquired by Novell and renamed "SUSE" because people struggled with the lowercase "u" in the middle of an otherwise all-caps name although the SuSE team liked that kind of silhouette: they named one of their key differentiators YaST ("Yet another Setup Tool"). SoME SeEM To LiKE ThAt.

A few months ago I blogged about IBM's discriminatory pricing strategy in the mainframe business and mentioned z/Linux, the mainframe version of Linux. SUSE has been the market-leading mainframe Linux distribution all the time and still has a market share of 80% (worldwide).

I'm sure that SUSE is a pretty substantial part of the value that Attachmate saw in the acquisition. There's a lot of potential to narrow the gap between SUSE and Red Hat. For a company that doesn't own much intellectual property, Red Hat's margins are unbelievably high, suggesting to me that SUSE has a world of opportunity if it executes well. An open source model doesn't guarantee low prices all by itself: market dynamics still depend on effective competition.

Attachmate has already emphasized that SUSE will be run as a stand-alone business unit, and that the openSUSE community project "is an important part of the SUSE business" and "no change to the relationship between the SUSE business and the openSUSE project" is expected as a result of this deal. Pascal Bleser, a leader of the openSUSE project, writes on the official openSUSE blog that "the openSUSE Project has had, since its beginning, a very vibrant cooperation with Novell, especially with Novell’s SUSE business". Now he and his team "are looking forward to continuing this once Novell and SUSE become part of Attachmate!"

882 patents to be acquired for $450 million

My focus on this blog is on how patents get used -- from an open source angle -- and not on the secondary market for patents. But I do know that numerous patents are on the auction block all the time: some are sold individually or in smaller packages, others are sold in large blocks. Deals come in all sizes. For example, a Morgan Stanley analyst estimated six months ago that a portfolio of 4,500 Nortel Networks patents and 1,000 patent applications was worth in excess of $1 billion.

The structure of the Novell deal appears to be such that Attachmate pays $6.10 in cash per share of Novell (NASDAQ:NOVL) shareholders, a total of approximately $2.2 billion. Since Novell has, according to certain reports, cash of approximately $1 billion in the bank, this means an "enterprise value" of approximately $1.2 billion. The price to be paid already takes into consideration that a Delaware company named CPTN Holdings LLC will acquire "all of Novell's right, title and interest in 882 patents [...] for $450 million in cash" (I quoted from the SEC filing related to the acquisition, to which the merger agreement is attached).

A list of those patents is not available. Some have pointed out that 882 is a greater number than that of all patents registered in Novell's name with the USPTO. This led some to believe that the number includes some patent applications, and it may. It's also possible that Novell acquired the ownership of some patents that have not yet been re-registered in its name.

But the one piece of information that could make a major difference is whether that count relates to 882 patented inventions or 882 per-jurisdiction patents. Software patents are granted in almost all of the industrialized world. In an analysis of international equivalents of patents over which Apple, Paul Allen's Interval Licensing and Oracle are suing other companies, I gave examples. I found that a certain Apple touch-screen software patent was filed for in the United States, Canada, China, South Korea, Japan, Australia, and 34 European countries. Depending on the approach, this could count as 1 patent, 7 patents (if Europe counts as one patent because of a centralized examination process at the EPO) or as 40 patents (since an EPO patent is a bundle of national patents, each of which results in additional costs, gets a separate patent number and would have to be enforced separately in its jurisdiction with potentially different outcomes; the number of countries in which an EPO patent actually gets registered varies greatly, with the 34 countries in that example being close to the maximum).

Financial structure: $2.2 billion for Novell minus patents plus $1.4-$1.5 billion

Attachmate offers to lay down $2.2 billion in exchange for a company that will, following the patent sale, have $1.4-$1.5 billion in the bank. That makes the transaction more affordable, and NOVL shareholders benefit because they will get to sell their stock at a price that is 28% higher than before a hedge fund named Elliott Associates (which already held a chunk of Novell shares at the time) made a buyout proposal. Attachmate's offer is 9% higher than the closing price on the last trading day before the Attachmate-Novell announcement.

Wall Street clearly believes in this deal. Yesterday NOVL closed at $5.93. This means that investors buying the stock now will -- all going well -- realize a 3% gain, which is a good deal for the "arbs" (risk arbitrageurs) if the deal closes quickly. They need a certain margin since every once in a while a deal may fall through for whatever reason and then they may have to sell their holdings with losses. A 3% margin so shortly after the announcement suggests that those professional speculators expect the deal to close on those terms relatively quickly. It's a nice margin for a virtually certain quick flip but wouldn't make sense otherwise.

It's also a good sign that Elliott -- whose buyout offer got the ball rolling earlier in the year -- "will become a shareholder of Attachmate under the latest offer" (as Zacks.com reports). Some thought Elliott's offer in the spring wasn't serious and was just meant to force a sale. However, by putting its money where its mouth is, that hedge fund shows it really believes in the longer-term value of the combined company and wasn't merely looking for an exit strategy concerning Novell.

In this financial context, let me restate a disclosure I previously made in connection with possible investments in mainframe software companies: at the time of publication of this posting, I do not own stock (or related derivatives) in any of the companies mentioned.

Patent holding consortium organized by Microsoft

The fact that Microsoft organized CPTN Holdings LLC, the consortium that agreed to buy those 882 patents, has made waves in the media. I have seen worries expressed over this fact in articles by Steven J. Vaughan-Nichols ("Dark horse Attachmate buys Novell, Microsoft helps"), Dana Blankenhorn ("Novell sale shows its control by Microsoft"), Katherine Noyes ("Microsoft's Hand in Novell Deal Bodes Ill for Linux"), Rob Enderle (who sees Red Hat and Google as "first targets" of a "creative" IP strategy), and Timothy Prickett Morgan, who asked:

"Novell shareholders have to wait to see exactly what Attachmate is selling off to Microsoft and then ponder the deal. Wouldn't it be funny if Microsoft ended up owning whatever rights to Unix that Novell thinks it has?"

The wait-and-see approach is right. Actually, the other journalists -- all of whom I really respect -- also made it clear where the facts end and their gut feelings begin.

CPTN Holdings LLC is a consortium organized by Microsoft but involving other "technology companies". Names, numbers and the allocation of shares are unknown at this stage, but it's certain that the decisions of the consortium will not be taken by Microsoft singlehandedly. That fact should actually give a lot of comfort even to those who don't want to trust Redmond.

No big difference

I previously commented on Microsoft's cooperative approach to patents and still can't see any reason to be particularly concerned about. (I could, however, put together a whole list of other patent holders I would be uneasy about.) Microsoft's dispute with Motorola is just one of many in the smartphone context. So even if Microsoft bought those patents directly as opposed to being just one of several shareholders of CPTN Holding LLC, I wouldn't be concerned.

Mary Jo Foley, famous for her intimate knowledge of Microsoft, looked into "Microsoft's role in the Novell-Attachmate deal" and quoted Horacio Gutierrez, Microsoft’s Corporate Vice President and Deputy General Counsel of Intellectual Property and Licensing, with a business-as-usual statement.

I just want to be rational. The prospect of a company that already owns about 15,000 US patents -- and uses them pretty reasonably -- acquiring indirect, partial ownership of hundreds more doesn't set off an alarm on my end. At their current rate (roughly 3,000 new US patent applications a year) they file for that number of new patents every quarter, and I'm sure many of those -- as well as many patents obtained and held by countless others -- read on some open source software.

Software patents are a fact of life. Even if all of those 882 patents were invalidated overnight, the patent threat to open source wouldn't be diminished in any noteworthy way.

I also don't subscribe to theories that the Open Invention Network plays any role in this transaction. The OIN doesn't appear to impact anything too much. I have yet to see a single verifiable success story involving the OIN. My guess is that Attachmate will look at all of the partnerships Novell has in place, continuing with those that deliver tangible value and revisiting those that don't. The patents that are sold to CPTN Holdings LLC will be outside the scope of the OIN, but that could happen to the patents of any other OIN member or licensee. Other OIN companies, especially IBM, are far bigger patent holders than Novell.

A year ago I warned against the acquisition of MySQL by Oracle. The FOSS community was divided, but today hardly anyone describes Oracle as a good steward of the open source assets it acquired. Some argued that the acquisition was a way to prevent Microsoft from acquiring Sun's patents and using them against open source, but Oracle's suit against Google proved that preference completely wrong.

I will continue to watch this process, of course, and I will discuss relevant new information if and when it becomes available.

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