Novell Fumes Over Steve Ballmer’s Linux Claims

Novell chief executive Ron Hovsepian has fired off a furious open letter in an effort to limit the damage caused by Microsoft CEO Steve Ballmer’s comments last week to the effect that all Linux users owe Microsoft money.

Ballmer appeared to confirm the Linux community’s worst fears last week when he suggested a recent deal between Microsoft and Novell was just the beginning of a patent licensing program that would eventually be extended to all Linux distributors and users.

In a question-and-answer session after his keynote speech at the Professional Association for SQL Server (PASS) conference in Seattle, Ballmer said Microsoft was motivated to sign the deal with Suse Linux distributor Novell because Linux “uses our intellectual property” and Microsoft wanted to “get the appropriate economic return for our shareholders from our innovation.”

Ballmer went on to describe Linux as “an undisclosed balance-sheet liability” and said only Suse Linux users “have paid properly for intellectual property from Microsoft.”

Hovsepian in his letter is clearly concerned that Microsoft might use the deal to decimate the Linux economy and hold all Linux users to ransom—a scenario previously voiced only by the most hard-core conspiracy theorists.

“Since our announcement, some parties have spoken about this patent agreement in a damaging way, and with a perspective that we do not share. … We disagree with the recent statements made by Microsoft on the topic of Linux and patents,” Hovsepian wrote. “When we entered the patent cooperation agreement with Microsoft, Novell did not agree or admit that Linux or any other Novell offering violates Microsoft patents.”

He went on to describe all that Novell has done to protect the open-source community from patent litigation, such as using the company’s own software patent portfolio as a shield, speaking out against a European Union directive that would have liberalized software patent practice, offering indemnification to its Linux customers and efforts to reduce the issuance of “bad patents” in the United States.

Hovsepian explained that Novell’s main concern with the Microsoft deal was to improve interoperability between Linux and Windows, with the patent agreement added as an afterthought. “Our interest in signing this agreement was to secure interoperability and joint sales agreements, but Microsoft asked that we cooperate on patents as well, and so a patent cooperation agreement was included as a part of the deal,” Hovsepian wrote. “Novell has a significant patent portfolio, and in reflection of this fact, the agreement we signed shows the overwhelming balance of payments being from Microsoft to Novell.”

Microsoft agreed to pay Novell US$440 million for Linux technical support, while Novell paid $40 to Microsoft for the agreement not to sue. But what Novell now claims was an afterthought has been roundly condemned by everyone else in the IT industry, with Sun saying the deal would damage the open-source movement, and Samba calling it “unacceptable.”

Microsoft responded to Novell’s letter in a statement, in which it said the two companies “have agreed to disagree on whether certain open source offerings infringe Microsoft patents and whether certain Microsoft offerings infringe Novell patents.”

The deal doesn’t admit infringement, but it doesn’t take a stand in the other direction either, Microsoft pointed out: “The agreement between our two companies puts in place a workable solution for customers for these issues, without requiring an agreement between our two companies on infringement.”

While Novell is “absolutely right in stating that it did not admit or acknowledge any patent problems,” Microsoft reiterated that it believes Linux infringes on Microsoft patents. Therefore, it was “necessary and important” to create a mechanism whereby Linux users could pay Microsoft for those patents, Microsoft said.

Novell might not be admitting any liability, but it nevertheless helped put Microsoft’s plan of collecting money from Linux users into action, Microsoft said, for which it thanked Novell. “We are gratified that such a solution is now in place,” the company stated.

-Matthew Broersma, Techworld.com (London)

Related Links:

• Microsoft to Face Linux Licensing Challenge

• Linux Advocates Wary of Novell-Microsoft Tie

• Microsoft, Novell Team in Linux Deal

• Sun CEO Schwartz Slams Microsoft-Novell Pact

• Samba Team Blasts Novell-Microsoft Deal

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