Novell: Deal with Microsoft Not an Admission of IP Infringement

Responding to our story yesterday on comments made last week to an analysts' conference by Microsoft CEO Steve Ballmer, which were interpreted later as a threat against Linux distributors and/or users - and whose interpretation Microsoft repeatedly refused to deny - Novell's global public relations director Bruce Lowry told BetaNews this afternoon that his company interprets its cooperation agreement with Microsoft as mutual decision not to press the issue of whose code appears in whose operating system.

On February 15, Ballmer repeated an oft-spoken claim that Windows in the enterprise is less expensive to use and maintain than Linux - a claim which indeed has been substantiated by independent research, although other researchers present evidence to dispute it. But a sentence he spoke immediately afterward -- especially when presented out of context from Ballmer's "cheaper Windows" build-up -- appears to say that Novell's agreement with the company places a monetary value on the intellectual property Microsoft has often claimed that Linux authors have misappropriated.

"I do think it clearly establishes that Open Source is not free and Open Source will have to respect intellectual property rights of others just as any other competitor will," Ballmer said.

When asked by BetaNews yesterday just what context Ballmer meant to frame that statement in, the company's responses seemed to support the context of a veiled threat.

That's not how Novell perceives the agreement. "This is not the first time that this issue has surfaced," Lowry's response began.

"The agreement with Microsoft has three components: technical cooperation around virtualization, web services management and document compatibility; business cooperation involving distribution of SUSE Linux Enterprise coupons by Microsoft (plus some joint marketing); and a patent cooperation agreement, whereby Novell makes a covenant not to sue Microsoft customers over patents and Microsoft makes a covenant not to sue Novell customers over patents."

Indeed, that's how Microsoft framed the agreement on the day of its announcement last November 2. As Microsoft's senior vice president and general counsel Brad Smith stated during the joint press conference that evening, "We recognize that we would need to build a bridge that would really respect the needs of both [proprietary and open source] business models, that would respect the intellectual property rights and needs of people and companies in both of these parts of the industry. And we would need to do it in a way that would ensure that both of our companies remained in compliance with all of our other licensing and legal obligations, given the varied range of license agreements we were already using, and to some degree, subject to in our industry.

"To do that, one of the things we fashioned was an approach that will ensure, for example, that every customer who purchases a subscription, for example, for SUSE Enterprise Linux will get not only service and support from Novell, but will get as part of that, in effect, a patent covenant from Microsoft," Smith continued. "We knew that this was something that we had to figure out a way to accomplish, because that was the number-one thing that customers were telling us...that they wanted us to find a way to address the patent issues directly among ourselves in the industry, so they wouldn't have to figure out how to deal with these things instead. By fashioning this covenant, we've been able to do that."

As Steve Ballmer saw it that day, one of the benefits of the agreement was being able to resolve a key interoperability dilemma. "For anybody who runs a mixed, and particularly SUSE Linux environment, this is all good news," Ballmer stated last November.

"The technical aspects of these agreements will result in higher levels of interop between Microsoft Windows and Novell's SUSE Linux environment. We're going to raise the bar in terms of make it easier for customers to manage these mixed environments. Systems management is a particular challenge for customers, and we're particularly interested in helping work on the interoperability with Novell in that area."

Today, Novell's Lowry admitted to BetaNews that interoperability was a key issue to his company as well, but for a surprising reason: "We believe these agreements provide a powerful new way for customers to integrate Linux into their environments. Given Windows' ubiquity, everyone has Windows, so making it easier for Linux to interoperate in Windows environments is positive for customers."

At the time of the agreement, Novell interpreted Microsoft's actions as a new pledge not to sue Linux developers or customers, and said so in Ballmer's presence. "Microsoft is announcing that they are not going to assert patent infringement claims against individual open source developers," stated Novell CTO Jeff Jaffe last November. "So that's really, really important for open source. Open source is, in many ways, the innovation engine of the entire IT industry, and now, this statement just makes that so much stronger and so much more important."

Although he didn't say it directly, Lowry's conclusion in his response to BetaNews highlights the divergence between Microsoft's stance last November and Ballmer's public stance this month. It is not, Lowry made clear, an IP licensing agreement in Novell's view.

"Novell has never admitted that there are any Microsoft patents in Linux," Lowry told BetaNews. "The mutual covenants not to sue customers on patents was simply to remove the issue from the table for our customers. Microsoft has, at times, chosen to highlight the patent agreement in its public statements. We believe the interoperability pieces have the most resonance with customers. Regardless of what component of the deal one chooses to focus on, it's important to keep the whole package in mind, since it is, overall, positive for Linux."

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