Re: [SLUG] Microsoft rides the NERD SLED!

From: Paul M Foster (paulf@quillandmouse.com)
Date: Fri Nov 03 2006 - 18:59:59 EST


Rich Morgan wrote:
> On Fri, November 3, 2006 1:03 pm, John Pugh wrote:
>>
>> Patent protection was probably used incorrectly or at least read and
>> construed incorrectly - bottom line - Microsoft and Novell will not sue
>> any entity over patent issues included in each others product portfolio.
>
>
> "We've made two promises under this agreement," said Brad Smith, senior
> vice president, general counsel, corporate secretary, legal and corporate
> affairs for Microsoft. "One is a promise that we won't assert our patents
> against individual open-source developers. These are individuals that are
> contributing code, not creating it as part of their job, but acting in an
> individual non-commercial way. The second is for developers who are
> getting paid to create code that Novell then takes and inputs into its
> distribution that is then covered within the open-source agreement between
> us."
>

Notwithstanding Eben Moglen's concerns, this statement from Brad Smith
is not what was published in the WSJ:

"At the heart of the deal is a 'patent covenant' under which Microsoft
agreed not to file patent-infringement charges against users of Suse
Linux, and Novell agreed not to sue users of Windows."

This doesn't say that, for example, Microsoft won't sue users of Debian.
And Smith's statement appears to only apply to developers who aren't
being paid to develop Open Source software.

So we have apparently two conflicting statements about a contract we
haven't read (and probably won't). That's the problem when lawyers get
involved. As a community, we have no way of knowing whether Novell's
lawyers are sharp enough to have closed any loopholes Microsoft could
squeeze through.

WSJ also said:

"Financial terms weren't disclosed, but involve various payments between
the two companies, including Microsoft's paying Novell for a minimum of
roughly 70,000 'coupons' that Microsoft corporate customers can convert
into annual subscriptions to receive support for Suse Linux. The value
of each of those coupons varies between roughly $400 and $1,500 a year,
Novell Chief Executive Ron Hovsepian said. Other payments include a
'running royalty' stemming from the patent covenant that Novell will pay
to Microsoft, executives at the companies said."

So Microsoft is paying Novell to support 70,000 MS customers who may
need Suse/Linux support. Microsoft pays Novell to support its product
with Microsoft customers. Okay. But then there's that "running royalty"
thing.

Eben Moglen's concern from C|Net:

"If you make an agreement which requires you to pay a royalty to anybody
for
the right to distribute GPL software, you may not distribute it under the
GPL," Moglen told CNET News.com Thursday. Section 7 of the GPL "requires
that
you have, and pass along to everybody, the right to distribute software
freely and without additional permission."

So the question is whether Novell is *required* to pay Microsoft for the
right to distribute software it already had the right (supposedly) to
distribute. And whether re-distribution of the software (under the GPL)
becomes a problem.

At this point, not having seen the contract, I don't think there's any
way we can determine if this whole thing is a good or bad deal for us.
Rich is welcome to boycott and complain, but I think that's a bit
extreme and premature.

I'm more inclined to step back from the deal and wonder why Microsoft
would agree to this, what they get out of it, and the ways in which
Suse/Novell and we can be screwed by it. Novell's motivation, I
understand. They get a chunk of change, and immunity from Microsoft's
lawyers.

Microsoft? They don't need Suse to support Linux software used by
Microsoft customers. Their engineers are plenty smart enough to figure
out how to support Suse themselves. Could they be concerned that Novell
holds patent(s) they could be sued on? Seems unlikely. They could
re-engineer infringing software as fast or faster than we could.

Some other scenarios:

Pay Novell to support Microsoft customers, then encourage customers to
deluge Novell with support calls. You could put Novell into bankruptcy
in short order if you worked it right.

Peek at Novell's patent portfolio to see what they've *really* got. Once
you know, terminate the agreement and start suing at will. So it costs
you a few billion. Microsoft's got money in spades.

There are probably at least a hundred more plausible ways Microsoft
could use this opportunity to screw Novell and the Open Source
community. The folks at Microsoft are nothing if not devious, and
they've left a trail of dead partners in their wake for twenty years
now. So I can't imagine there's not some sort of poison pill somewhere
in here.

One other point: EV-1 now regrets their "royalty" agreement with SCO,
who drove that deal with FUD. You may remember the furor a while back.
That deal made EV-1 persona non grata with a lot of people. I wonder how
much this deal between Microsoft and Novell will put Novell in the same
position.

Don't feel betrayed. Companies operate in their own best interests.
After customers and stockholders, the Open Source community is a
*distant* third.

All I can say is good luck to Novell. This was not a thriving company
before they bought Suse. Microsoft had sucked the life out of the LAN
market already, to the detriment of Novell. And I'm not sure Suse had
enough juice in it to support Novell through the eventual demise of
Netware. It's very tough to keep a commercial distro company alive,
regardless of the business model; there are countless examples of failed
distro companies.

Suse is still a very fine distro...

Paul

-- 
Paul M. Foster

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