Microsoft and Novell: Understanding the IP Implications

by on November 2, 2006 · 8 comments

Microsoft and Novell announced a collaborative effort. Whoa, this is big news! Windows and SuSE Linux, proprietary and open source, Microsoft and Novell–working together? Well, yes, according to a recent announcement. And for this collaborative effort to have even been formalized, a required element was some intellectual property rights housecleaning.

Microsoft’s press release says this:

First, Microsoft will work with Novell and actively contribute to several open source software projects, including projects focused on Office file formats and Web services management. Second, Microsoft will not assert its patents against individual noncommercial open source developers. And third, Microsoft is promising not to assert its patents against individual contributors to whose code is included in the SuSE Linux Enterprise platform, including SuSE Linux Enterprise Server and SuSE Linux Enterprise Desktop.

From an intellectual property perspective, numbers 2 and 3 standout – Microsoft’s legally binding promise not to assert its IP rights against SuSE Linux.

What is Microsoft doing here? It’s trying to put SuSE developers at ease that they won’t be sued. So there’s no need to obtain a license from Microsoft. Furthermore, there’s no need for sublicensing – which is particularly important for the decentralized nature of open source development.

Non-assertion covenants (also called a “promise not to assert” or “covenant not to sue”) are binding agreements. It’s a “promise” but it’s still legally enforceable under the doctrine of promissory estoppel–if Microsoft were to withdraw its promise, anyone who justifiably relied on the promise and suffered harm from the withdrawal can sue. They are ways for one party with intellectual property rights to create zones of enforcement and increase certainty for other parties. Its an example of market participants contracting around (or within) the patent and copyright legal system to reduce transaction costs of negotiating, monitoring and enforcing licenses.

Non-assertion promises are better than RAND (Reasonable and Non-Discriminatory) licenses. What is “reasonable” and “non-discriminatory” depends on the particular circumstance and is open to legal interpretation and business negotiation hassles. Furthermore, RAND does not mean royalty-free. For more on Non-assertion covenants see Andy Updegrove’s informative blog post.

I believe we’ll see more and more of these non-assertion agreements from IP rights holders. And I expound further on this in my posting at the ACT blog.

Comments on this entry are closed.

Previous post:

Next post: