Novell hits jackpot in Microsoft patent pay-out

 

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By Barry Collins

Posted on 2 Jan 2008 at 08:17

The extent of Microsoft's generosity to its open-source patent partners has been revealed in Novell's latest financial statement.

Novell's SEC filing reveals the company received $355.6m from Microsoft during 2007, although some of that payment is "being recognised over future periods".

The payment forms a significant chunk of Novell's revenue, with the company turning over $932m in 2007.

Novell was heavily criticised within the open-source community for signing the deal with Microsoft. The agreement saw the two companies agree to work on a series of interoperability initiatives, and not sue one another's customers for patent infringement.

However, Novell came under fire from open-source rivals for tacitly conceding that Linux may indeed breach Microsoft's copyright. "Through the accumulation of patents that may be used to shield the Linux environment, including users of Linux software, the Open Innovation Network (OIN) has obviated the need for offers of protection from others," said Jerry Rosenthal, CEO at OIN, an organisation that helps acquire patents for the open-source community.

Indeed, Novell was forced to defend its position in an open letter to its customers. "The intended effect of this agreement was to give our joint customers peace of mind that they have the full support of the other company for their IT activities," said Novell CEO, Ron Hovsepian.

"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."

The figures quoted in the financial statement certainly show that to be true.