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06.13.07

Not Just Customers – Novell Pays Royalty for MS Patent License

Posted in Boycott Novell, Deals, Deception, FSF, GPL, Microsoft, Novell, Patent Covenant at 12:05 pm by Shane Coyle

In Novell’s recent 10-Q filing, which contains a very lucid explanation of the overall scope of the Microvell deal, it is mentioned that Novell does indeed get released from liability for patent infringement prior to the deal (with "certain exceptions"), and that Novell agrees to pay royalties – a minimum of $40M – on their open source software shipped under the agreement going forward in exchange for that release.

Under the Patent Cooperation Agreement, Microsoft agreed to covenant with our customers not to assert its patents against our customers for their use of our products and services for which we receive revenue directly or indirectly, with certain exceptions, while we agreed to covenant with Microsoft’s customers not to assert our patents against Microsoft’s customers for their use of Microsoft products and services for which Microsoft receives revenue directly or indirectly, with certain exceptions. In addition, we and Microsoft each irrevocably released the other party, and its customers, from any liability for patent infringement arising prior to November 2, 2006, with certain exceptions. Both we and Microsoft have payment obligations under the Patent Cooperation Agreement. Microsoft made an up-front net balancing payment to us of $108 million, and we will make ongoing payments to Microsoft totaling a minimum of $40 million over the five year term of the agreement based on a percentage of our Open Platform Solutions and Open Enterprise Server revenues.

Everyone dust off their GPLv2 and turn to Section 7…

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