Microsoft, Apple, Oracle, EMC consortium filing withdrawn

A German filing to form CPTN to purchase Novell patents have been withdrawn

In a move that will be seen by many as a sign of open-source advocates' influence, a filing in Germany to create a consortium led by Microsoft to buy Novell patents has been withdrawn.

Early in December Microsoft, Apple, EMC and Oracle notified the German regulator that they planned to form CPTN Holdings with a view to purchasing 882 of Novell's patents. But the filing was withdrawn (Rücknahme) on Dec. 30. No reason was given for the withdrawal by German authorities, but it is likely voluntary as authorities would not yet have had time to investigate the proposal.

CPTN Holdings still intends to purchase the patents, however.

"This is a purely procedural step necessary to provide time to allow for review of the proposed transaction," a Microsoft spokesperson said in an e-mailed statement. Microsoft declined additional comment. Other member companies of CPTN didn't immediately respond to requests for comment.

CPTN may have withdrawn the filing in order to make tweaks that would help it pass muster with European regulators and ease critics' concerns.

In recent weeks, the German Federal Cartel Office has received letters and recommendations from various open-source organizations including the U.S.-based Open Source Initiative (OSI) and the Free Software Foundation Europe (FSFE).

These open-source advocates are extremely alarmed that patents with claims on some elements of open-source software could fall into the hands of companies that compete with that open-source software. Given Novell's past involvement in free software development, it seems very likely that at least some of the company's patents would cover free software technologies.

"The founders and leaders of CPTN have a long history of opposing and misrepresenting the value of open source software, which is at the heart of Web infrastructure and of many of the most widely used software products and services. The sole or leading competition for several products from the CPTN principals are open source," said OSI in its letter.

"In many markets (such as operating systems, desktop productivity, web servers), Free Software programs are the key competitors to Microsoft's offerings. And Microsoft has used patent lawsuits to stifle competition from Free Software (e.g. TomTom), and has long used unsubstantiated patent claims for a continued campaign of fear, uncertainty and doubt against Free Software," said Karsten Gerloff, FSFE president.

"CPTN might also decide to sell the patents on to third parties. These could be so-called patent trolls or 'non-practicing entities.' In September 2009, Microsoft sold 22 patents related to GNU/Linux during an auction where only non-practicing entities were invited," Gerloff added.

But CPTN's decision to withdraw the filing doesn't provide much reason to relax, according to Gerloff.

"The battle is not over. Perhaps we have a small amount of breathing space, but the battle is not over."

Novell is being bought by Attachmate, but the separate sale of Novell's patent portfolio to CPTN for US$450 million was already agreed.

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