Open Source Group Challenges Attachmate Bid for Novell

Will European regulators delay acquisition of Novell over patent issues?

Novell could remain a public company for a bit longer than first anticipated.

In November, privately held software vendor Attachmate announced its intention to acquire Novell (NASDAQ: NOVL) for $2.2 billion. Part of the Novell acquisition involves another deal with a group called CPTN Holdings, which is set to acquire 882 Novell patents for $450 million. The Attachmate deal closing is contingent on the closing of the CPTN patent sale, which is where the potential delay could arise.

Just before the end of the year, the Open Source Initiative (OSI) issued a request to the German government to investigate the Novell CPTN patent sale. The OSI is one of the leading bodies in the open source movement and is responsible for approving and maintaining the list of bona fide open source licenses that comply with the open source definition.

CPTN is made up of a group of vendors including Microsoft, EMC, Oracle and Apple.

"The fact that Microsoft was leading the takeover of Novell's patents was itself alarming to the open source community, but when it was revealed that Microsoft had recruited Oracle, Apple and EMC to be co-owners of the patents, the OSI board felt compelled to request that competition authorities take a closer look at the proposed transaction," OSI president Michael Tiemann wrote in a blog post.

Microsoft has long alleged that open source software potentially infringes on its intellectual property. Back in 2007, Microsoft entered into a multi-year agreement with Novell that included a patent covenant agreement intended to protect Novell's Linux users.

The OSI's letter to the German Federal Cartel Office (FCO) noted that "the proposed CPTN transaction represents a potentially new and unprecedented threat against open source software." The OSI goes on to raise concerns about whether the CPTN patent deal could be used to reduce open market competition and spread more patent fear, uncertainty and doubt (FUD)."

"Secrecy is customary in business transactions, but secrecy can also be used to hide nefarious intentions," the OSI's warned. "Given the potential for collusion between these competitors to reduce competition amongst them and to harm competition that exists in the marketplace today, competition would be better served by the FCO thoroughly investigating the facts and evidence concerning this transaction, rather than giving them the benefit of the commercial doubt."

Attachmate CEO Jeff Hawn has issued an open letter to Novell's Linux customers describing his company's intention to continue to support SUSE Linux. Neither Novell nor Attachmate however were able to comment about the OSI's objections over the patent sale.

"As you can appreciate we are not able to comment on details of the acquisition beyond what has already been disclosed until closing," an Attachmate spokesperson told

It's not clear at this point, whether or not the OSI's objections will result in a material delay of Attachmate's acquisition of Novell. In 2009, European concerns over potential open source competition risks helped to delay Oracle's acquisition of Sun by several months.

Sean Michael Kerner is a senior editor at, the news service of, the network for technology professionals.

Tags: open source, Microsoft, patents, Novell, Attachmate

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