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Tuesday, January 11, 2011, 12:30 pm PT (03:30 pm ET)

Novell patent pool filing by Microsoft, Apple, Oracle, EMC withdrawn

A plan created by Microsoft, Apple, Oracle, and EMC to create a consortium to acquire hundreds of Novell patents has been withdrawn after complaints from open source advocates, leaving the fate of the nearly half billion dollars' worth of patents uncertain.

It was first revealed in mid December that the four companies had set up CPTN Holdings LLC to jointly acquire 882 Novell patents for $442 million.

The rest of Novell was to be sold to Attachmate for $2.2 billion, with that sale being "conditioned upon the closing of the proposed sale of certain intellectual property assets to CPTN Holdings LLC." according to the original Novell press release about the acquisiton.

However, according to a new PC World report, the filing with German regulators to create the joint entity has been voluntarily withdrawn, with no information available to explain why.

Open source controversy

The pact had drawn intense criticism from open source advocates, with both the American Open Source Initiative (OSI) and the Free Software Foundation Europe (FSFE) filing complaints about the plans with the German Federal Cartel Office, which had received the original CPTN proposal.

The report noted that the filing was too new to have actually been rejected by German authorities, as no investigation had yet occurred, indicating that the CPTN members had voluntarily backed out of the filing. Whether the legal entity will be set up in another location, or under different terms, or dissolved entirely, is still yet unknown.

Free software groups expressed serious concerns that Novell's patents very likely involved a variety of concepts related to free software technologies, given the company's ownership of SUSE Linux and Ximian and its relationship with other free software projects including OpenOffice and Mono.

Novell was also a founding member of and major contributor to the Open Invention Network, a group created by IBM, NEC, Philips, Red Hat and Sony to hold patents specially for use in defending free software from outside patent attacks.

Complaints from the OSI, FSFE

The OSI filed a letter complaining that, "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."

FSFE president Karsten Gerloff added that "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."

Gerloff noted that the CPTN members could, in addition to directly thwarting open source, also transfer the patents to "non-practicing entities," or companies that exist only to sue others over patents they hold, commonly referred to a patent trolls.

"In September 2009," Gerloff pointed out, "Microsoft sold 22 patents related to GNU/Linux during an auction where only non-practicing entities were invited."

Fears about Android

Google's Android OS is already being sued by Oracle, which recently acquired Sun and subsequently has accused Android of infringing Sun's Java-related patents to create Android's Dvalik, a Java-like virtual machine platform that works like Java and uses the Java language without technically being Java, therefore escaping (in Google's view) the licensing requirements of Java.

Oracle is seeking to force Google to legitimately license Java, something that would add cost to Android and may require a significant redesign or complete replacement of its core virtual machine architecture.

The involvement of Oracle in the CPTN pact had only heightened existing concerns. Both Microsoft and Apple are also direct competitors to Google's Android, and both companies have sued (and been sued by) Android licensees, although neither Microsoft nor Apple have taken any legal action against Google directly related to Android.

While Microsoft has threatened to take nonspecific patent-infringement actions against other companies that make use of Linux and OpenOffice, and financially supported SCO as it ensnared a variety of companies using Linux in a legal quagmire that dragged on for years, Apple has typically reserved its patent library for defensive purposes.

As the most sued tech company on the planet, Apple has repeatedly fought to nullify patents or settle patent claims using patent cross-licensing. Apple formed such deals with both Microsoft and Creative, and has shot down a variety of patents that other companies paid millions to settle, including a large number of Burst.com patents.

Apple is currently involved in a variety of patent disputes with Nokia, Motorola and HTC, and is also fending off renewed patent claims from former Microsoft founder Paul Allen's "non-practicing entity."