Microsoft pulls papers for Novell patents deal worth $450 million

By Tom Warren, on 11th Jan 11 7:45 pm with 3 Comments

Microsoft announced in November that it would receive some intellectual property assets from Novell as Attachmate acquired the company for $2.2 billion. It appears that Microsoft has withdrawn its plans recently.

The software giant’s co-owned CPTN Holdings LLC was to acquire some technology from Novell for $450 million as part of the deal. Microsoft setup the LLC back in 2006 when the two companies signed a patent deal, designed to focus on virtualization, asset management and document formats. Novell agreed to add Microsoft Office’s Open XML format to the Open Office suite, available on the SUSE distribution. The terms of the agreements meant that Microsoft spent hundreds of millions of dollars on licensing fees, sales and marketing costs over five years, including $240 million for SUSE Linux Enterprise Server Subscription certificates. Novell also agreed to pay Microsoft a percentage of revenue from its open-source products.

However, Microsoft has withdrawn its plans a couple of weeks ago. IDG News reports that a filing to the German Federal Cartel Office has been withdrawn. The filing was withdrawn on December 30 and no reason was given for the withdrawal. IDG speculates that the withdrawal is voluntary as authorities would not yet have had time to investigate Microsoft’s proposed CPTN holdings.

Microsoft was originally planning to purchase 882 of Novell’s patents as part of CPTN holdings. The deal raised alarm bells from various open-source organisations such as the U.S. based Open Source Initiative (OSI) and the Free Software Foundation Europe (FSFE). Both organisations wrote to the German Federal Cartel Office in recent weeks expressing their concern that some open-source software patents could fall into the hands of companies that compete with that software.

Update: Microsoft has confirmed the withdrawal to WinRumors. “This is a purely procedural step necessary to provide time to allow for review of the proposed transaction,” said a Microsoft spokesperson. CPTN holdings will refile but it’s not clear why Microsoft pulled back the papers so shortly after complaints. WinRumors asked Microsoft to clarify the timing of the withdrawal but the company refused to provide any additional information beyond its comment.

  • http://twitter.com/FOSSpatents FOSS Patents

    Actually this has meanwhile been clarified — the deal isn’t dead: http://cloudcomputing.sys-con.com/node/1673615

    • Tom W

      Thanks, just got a response from Microsoft – article updated.

  • GP007

    Wow 882 patents eh, cool stuff. I also get a kick out of this “Both organisations wrote to the German Federal Cartel Office in recent weeks expressing their concern that some open-source software patents could fall into the hands of companies that compete with that software.”, ya doesn’t that basically mean any software maker?

    Actually I bet if it was someone else and not MS buying them the FSFE and OSI wouldn’t cry foul.