Justice Department Approves Novell Patent Acquisition with Revisions

Strategic Insights -

The U.S. Department of Justice has given its nod to the acquisition of Novell patents by CPTN Holdings LLC, a consortium owned by Microsoft, Oracle, Apple, and EMC, after the parties revised their agreements to alleviate antitrust concerns. The department stated that the original deal would have harmed open-source software, such as Linux, by limiting its ability to innovate and compete in the development of operating systems and other technologies. Although the transaction will proceed, the department will continue to investigate the distribution of the patents to the CPTN owners.

Key Takeaways:

  • The Department of Justice has approved the acquisition of Novell patents by CPTN Holdings LLC, a consortium owned by Microsoft, Oracle, Apple, and EMC.
  • The parties revised their agreements to address the department's antitrust concerns, ensuring that open-source software can continue to innovate and compete.
  • CPTN and its owners made significant changes to their formation agreements, including the sale of Novell patents to Attachmate, the exclusion of certain virtualization software patents from the acquisition, and the subject of all acquired patents to the GNU General Public License.
  • The Open Invention Network (OIN) License will be applied to all Novell patents acquired by CPTN, ensuring continued competition in the development of open-source software.
  • Microsoft will sell back to Attachmate all Novell patents it would have otherwise acquired, but will receive a license to use those patents.
  • The Department of Justice and Germany's Federal Cartel Office cooperated closely throughout the investigation, sharing information and assessments to coordinate potential revisions to the parties' agreements.

Statistics:

  • 882 patents and patent applications were acquired by CPTN from Novell.
  • $812 million was Novell's 2010 revenue.
  • Microsoft's 2010 revenue was approximately $62.5 billion.
  • Oracle's FY 2010 revenue was nearly $27 billion.
  • Apple's 2010 revenue was over $65 billion.
  • EMC's 2010 revenue was approximately $17 billion.

Sources:

  • Justice Department press release, no date given.
  • Sharis A. Pozen, Deputy Assistant Attorney General of the Justice Department's Antitrust Division.
  • Das Bundeskartellamt (German Federal Cartel Office).
  • Novell Inc.
  • CPTN Holdings LLC.
  • Attachmate Corporation.
  • Microsoft Corp.
  • Oracle Corp.
  • Apple Inc.
  • EMC Corp.